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BUYING on Lease-Option

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Lease Option Contract

This contract package includes the following documents:

  • Lease with Option to Purchase
  • Recording Form
  • Assignment
  • Seller’s Disclosure Form
  • Lead-Paint Disclosure Form
  • Move-In/Move-Out Checklist
  • Instructions and Tips

This packet is used by:  The BUYING ON LEASE OPTION PACKAGE is used when you are buying a property on lease option, and want to (i) live in the property with an option to buy it later, and/or (ii) assign your rights under the agreements to another investor or homeowner who will take over your position under the agreement.  This package includes all the documents you need to complete the contract transaction as a tenant-buyer and protect your interests.

The Documents

Lease With Option to Purchase
The Lease With Option to Purchase is a single agreement that includes both the right to live in the property as a tenant (the lease), as well as the right to buy the property at a future date for a predetermined price (the option). Combining the two agreements in one document bolsters your argument that you hold an equitable interest in the property, should a dispute ever arise or the owner refuses to sell the property pursuant to the terms of the option. The lease portion is tenant-friendly and the option is carefully drafted to identify the material terms of a future purchase agreement and permit a smooth exercise of your option. This agreement allows you to quickly and easily control a property with little to no money down. The agreement permits you to assign or sublet without the landlord’s permission, allowing you to easily market your position and control the property. Whether you want to stay and live in the property or “flip” the deal you struck to another investor for a profit, this is the agreement to get it done.

Memorandum of Lease With Option to Purchase (Recording Form)
The Memornadum of Lease With Option to Purchase is a short document that is recorded at the county Recorder's office putting the public on notice that you have a lease and an option to purchase the property, and that the owner is bound by those terms. Recording evidence of your option to purchase is one of the best ways to protect it. The recording of your right may put a cloud on the title of the property and make it more difficult for the owner to sell the property to someone else in violation of your option. You can record this document yourself, but we usually recommend using a local title company who will be sure to use the correct legal description of the property and ensure proper recordation.

Assignment of Lease with Option to Purchase
This is the document you use to assign your rights in the Lease with Option to Purchase to somebody else. Under this document you are the "assignor" and the person to whom your are assigning the Lease with Option to Purchase is the "assignee." Upon assignment the assignee is responsible for all of the obligations in the Lease with Option to Purchase and the owner’s remedies for any default is against the assignee. However, you are also assigning your right to buy the property to the Assignee, who is now the only one that can exercise the option.

Seller’s Disclosure Form
When selling real property, sellers generally have to provide the buyer with a Sellers Disclosure Form. Before you enter into a buyer-side lease-option, you may want to get the Seller to fill this form out so that you can make a more informed decision regarding whether and how much you want to buy the property for.

Move-In / Move-Out Checklist
If the Landlord has required you to pay a security deposit, you may want to conduct a move-in/move-out inspection. This document will help resolve any future disputes should any arise, relating to the condition of the property and the return of your security deposit.

Lead-Paint Disclosure Form
Housing built before 1978 may contain lead-based paint. Lead from paint, paint chips, and dust can pose health hazards if not managed properly. Lead exposure is especially harmful to young children and pregnant women. Before renting pre-1978 housing, landlords must disclose the presence of known lead-based paint and/or lead-based paint hazards in the dwelling. An approved form has been provided in this package. The owner should carefully fill this our and give a copy to you.

Instructions and Tips
This form will give you instructions for closing this kind of deal and tips and tricks from experienced investors to help you avoid costly mistakes.

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