Real Estate Lease Options Explained

Lease Agreement
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A real estate lease option is a contract that gives one party the RIGHT, but not the OBLIGATION, to purchase a property when certain conditions in the agreement are met.

In a lease agreement, there are various provisions and agreements between the lessor and lessee that set out the rights and obligations of each. One of these might be an option for the lessee to renew the lease at the end of the period.

The tenant would have the right, upon giving the proper notice, to renew the lease for another period.

Another possible real estate option that a tenant or lessee might have is the lease/purchase option. This option would specify that the tenant has the right to purchase the property at a specified price during the term of the lease. In some of these arrangements, the lessor or landlord may also apply a portion of rental payments to the purchase price or down payment of the property.

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