A lease option contract can be known by several other names. It may be called a lease with purchase option. It may be called a residential lease with option to purchase. No matter what it is called, its purpose is to combine a lease with an option to purchase.
In a standard lease, the lessor, the property owner, gives a lease to the lessee, the tenant. In return the lessee pays the lessor rent. In a standard option the optionor, the property owner, gives an option to the optionee, a potential buyer.
In return, the optionee pays the optionor an option fee. In a lease option the lessor/optionor, the property owner, gives a lease and an option to the lessee/optionee, the tenant. In return the lessee/ optionee pays the lessor/optionor rent. There is no option fee in addition to the rent. The lease may require a deposit to be applied to a security deposit, a key deposit, a cleaning deposit, last month’s rent, and/or whatever else the landlord wants.
This is not an option fee. We are going to show you the option clauses in a couple of different lease option contracts. We have given you examples of having the lease payments, the rent, apply toward the purchase price in the event the purchase option is exercised by the lessee/optionee. Remember, everything is negotiable. Keep this in mind if you are negotiating any type of lease option contract.