What is a lease purchase – A Tenant and Landord may enter into an Agreement whereby the Tenant may in the future wish to exercise an option to purchase the home they are renting. Terms of the Agreement will vary depending on the requirements of the Tenant and Landlord- some negotiation will be involved. Here are a few examples of some conditions to the Agreement:

1. Is the price to be set at current market value or the value at the time the option to purchase is exercised. We would highly recommend that the price set is by a Valuation Report. An independent Valuer would also be recommended.

2. Will any rents paid by the Tenant between the date  the Agreement is signed and the date at which the option to purchase is exercised be applied towards the purchase price by way of deposit.

3.  Generally a deposit will be payable to the Landlord which may or may not be refundable depending on the terms of the Agreement as security to secure the Agreement and the Terms. This can also be referred to as the option payment.

4. Should the Tenant’s interests be protected? Absolutely, this would be by registering a caveat against the property in accordance with the Agreement.

Happy Purchasing Kim