Lease-Option as an Option

In the current climate, a lot buyers and sellers are getting creative, buyers because credit is tight, and sellers because buyers are tight. The transaction form perhaps gaining the most popularity is the lease with an option to buy, or lease-option. This starts out as a landlord-tenant relationship and can thereafter be turned into a vendor-purchaser relationship. Consequently, the agreement needs to provide for both relationships. Here are a few of the things that need covered: if the buyer doesn't make lease payments, the seller needs to be able to evict him; if the buyer records the agreement and then defaults, the seller needs to be able to peel it off his title; if the seller doesn't pay the mortgage, the buyer needs to be able to protect his equity; and someone needs to be responsible for maintenance and repairs.

There are many issues in a lease-option transaction that either normally arise in a lease relationship but not in a sale or vice-versa. Get someone with some experience to draft up the agreement now and save yourself a world of hurt later.