Here is a form that might be used by a Seller planning to lease option a property they own. While I am not an attorney, this should not be construed as legal advice. Laws of each state vary, and it would be good to have this document reviewed by your attorney prior to use. But it may be a good template to begin discussion.
, Optionor, and
Optionee.
IN CONSIDERATION (which will be applied toward purchase price) of the sum of
paid by Optionee (the receipt of which is hereby acknowledged by Optionor) the Optionor gives to Optionee the exclusive option, right and privilege of purchasing certain Real property located in the
County of and State of , described as:
This option is subject to the following terms and conditions:
1) This option is not assignable by Optionee unless Optionor agrees separately and in writing.
2) There shall be additional option consideration of $ per month given to Optionee. The
monthly option consideration shall be credit toward the down payment/purchase price of the
property. The credit will only apply to months when the rent amount and any outstanding fees
owed (in the attached Rental Agreement) is paid on or before the due date and in full.
3) Optionor grants Optionee the right to exercise this option for a period commencing on
, 20 and terminating at midnight, , 20 . If not exercised, this
option shall expire midnight , 20 , and Optionor shall be released from all
obligations hereunder, legal or equitable. The obligation shall cease and the consideration here
above receipted for the Optionor, shall be retained by Optionor.
4) If Optionee elects to exercise this option the sale shall take place according to the terms of the
attached offer to purchase agreement, which have been signed by Optionee and Optionor
this same day.
5) Notice of election to Purchase shall be given by Optionee in writing, and by registered mail,
addressed to Optionor, at:
6) All provisions of the Rental Agreement between Optionor and Optionee pertaining to the
aforementioned property shall be performed by Optionee or this option may be withdrawn by
Optionor and Option consideration will be forfeited by Optionee.
OPTIONEE agrees to accept subject property in current “as is” condition. OPTIONEE agrees
to make all repairs major and minor to the above named property. Should OPTIONOR
be required to make repairs of any kind whatsoever to the property, the cost of such repairs
shall be added directly to the purchase price stated in the purchase agreement.
If there is a septic system, Optionee agrees to pay for and have the septic tank pumped out
on June 1st of each year this agreement covers.
If there is a pool Optionee agrees to open and close pool each year, and to maintain the pool.
OPTIONEE agrees to pay for any and all additional assessments incurred during occupancy
And prior to ownership (example but not limited to: water, sewer, sidewalks, or road paving)
9) The option consideration is for the sole purpose of granting the OPTIONEE the exclusive
right to purchase the subject property at the stated price and terms.
IN THE EVENT THAT OPTIONEE DOES NOT MEET THE TERMS AND CONDITIONS CONTAINED IN THIS AGREEMENT ALL OPTION CONSIDERATION PAID WILL BE FORFIETED BY OPTIONEE AND WILL BE KEPT BY OPTIONOR.
Initial ________
10) This option to purchase will be terminated and all option consideration forfeited, if payment
required on option agreement or any payment required on rental agreement is late for more
than ten days past the due date. Optionee understands that Optionor will be required to supply
their mortgage company with an accurate record of payment history including all instances of
late payments. Optionee understands such information could affect their ability to secure a
mortgage
11) This option to purchase shall apply to and bind the heirs, executors, and administrators
of the respective parties.
12) Optionor may be doing a 1031 exchange on this property and needs 30 days notice of closing
to work out the details with the title company and purchasing of another property.
13) If option money is forfeited by Optionee, for any reason, then the rental agreement will
automatically revert to a month to month agreement, so that Optionor may sell or re-lease the
property.
Optionee agrees that they will not record anything against the title, of said property, prior to
closing and owning this property.
Optionee understands that Optionor does not hold title (own) this property, but is transferring
their interest in the property. If Optionor can’t transfer title due to something out of their
control (ie.owner refuses to close or can’t transfer clear title). Optionor will reimburse Optionee the entire option consideration plus an additional A$500 for their inconvenience, as full and complete liquidated damages for Optionor not being able to close on this property.
EQUITABLE MORTGAGE: This Option to Purchase is not, and shall not be construed as, or
interpreted as any form of EQUITABLE MORTGAGE. It is hereby declared that it is not the intent of the parties to create a loan of any nature or to create a mortgage of any kind. In the event that the Optionee hereunder should ever raise such an issue in a court of law or otherwise this Option shall terminate immediately.
Optionor has advised the optionee to seek the advice of a mortgage lender and attorney prior to
signing this document.
18) Time is of the essence in this agreement.
The parties have executed this agreement on the date first above written.
Optionor(s): Optionee(s):
Witness: Witness:
Happy Investing!
