What is a lease option contract?
A lease option contract is a basic lease contract with a separate option-to-purchase contract. The tenant/buyer pays to the landlord/seller a non-refundable option consideration that is applied to the purchase price of the home. The tenant/buyer then pays to the landlord/seller rent to compensate the landlord/seller for the use of the property. Rent payments are made on a month to month basis. A portion of that monthly payment is often applied to the purchase price and/or down payment of the home. During the term of the lease, but before the option expires, the tenant/buyer has the exclusive right to buy the home under the terms to which both parties have previously agreed.
