As a general rule, this type of agreement provides for so-called “cross-refer” provisions to ensure that a violation of one agreement results in an automatic violation of the other. Since the tenant buyer has contracted to purchase the property as part of a rental purchase, the rental agreement often provides that the tenant-buyer for maintenance is repairs and repairs that are typically required by the owner. A special tenancy agreement is used when a tenant wishes to rent a property for a specified period of time, usually several years, and has the option of acquiring the property at the end or before the end of the period. Often, the tenant cannot buy the house immediately for a number of reasons – because they don`t have the money for a down payment, they don`t have enough credit points, they don`t have credit or they`re not ready to commit. And in a slow market, a lease option contract gives a seller more options as he or she earns a stable income. To have the option to buy without the obligation, it must be a lease. Since legalese can be difficult to decipher, it is always a good idea to check the contract with a qualified real estate lawyer before signing something so that you know your rights and exactly what you are getting. Pay attention to lease-purchase agreements – you may be legally obliged to purchase the house at the end of the lease, whether you can afford it or not. At the end of the rental period, the tenant/buyer has the opportunity to purchase the house. The lump sum and rental credit from the original deposit will only be released to the buyer in the form of a down payment on the house, if the tenant/buyer decides to buy it. The tenant/buyer is responsible for guaranteeing the mortgage required to complete the purchase of the house.
Treat the process as if you were buying a house: do your due diligence, research the neighborhood, compare prices with other neighbouring houses, research the contract and research the seller`s history. Be sure to read the text of the agreement carefully. Some leasing contracts create an obligation, not the OPTION, to buy the property. What happens when the contract expires depends in part on the type of agreement you have signed. If you have a lease agreement and want to buy the property, you will probably need to get a mortgage (or other financing) to pay the entire seller. If you dream of homes but you don`t quite have the down payment or credit profile for them to become a reality, a credit-to-buy option is one of the options you should consider. If you have any questions about the lease purchase, leasing option or real estate transaction, please contact us.