Lease Purchase Agreement
Although most leases are used only for temporary possession of property, a lease purchase agreement transforms the lease, allowing for an option to buy at the leases' end. To enlist in a lease purchase agreement, the lessor and lessee will sign a contract that, in exchange for a security deposit, the lessee will receive an option of buying the property. Some of the deposit may be considered a contribution to paying for the property. If the lessee opts out of purchase, it is treated as if it was a regular lease. By leasing though a lease purchase agreement, there are both advantages and disadvantages for the tenant. Although buying through a lease purchase agreement can make up for a lack of financing, unforeseen circumstances can mess up the agreement before ownership has transferred.
Fast Facts
- The typical contract is for 12 to 36 months
- lease purchase agreements are now an option at online real estate websites




