Provision Setting Out a Purchase Option
Overview of this form
The Provision Setting Out a Purchase Option is a legal document that grants a tenant the right to purchase the building where their leased premises are located at the end of a specified period. This form ensures that the tenant has the option to acquire the property at either the fair market value or a pre-determined dollar amount, providing a significant advantage for long-term tenants considering ownership of the property they are renting.
Key components of this form
- Section outlining the purchase option after the fifth year of the lease.
- Fair market value determination based on comparable properties.
- Option for a set dollar figure for the building's price.
When this form is needed
This form is useful in situations where a tenant wishes to secure the right to purchase the property they are leasing. It is commonly used in commercial leases where tenants may want to transition from renting to owning after establishing their business in the location over several years.
Who should use this form
- Commercial tenants looking to buy the property they lease.
- Landlords who want to include a purchase option in their lease agreement.
- Property investors considering long-term tenancy with an ownership option.
How to complete this form
- Identify the parties involved, including the tenant and landlord.
- Clearly state the terms of the purchase option, including the time period.
- Determine and indicate the fair market value or the agreed-upon dollar amount for the building.
- Ensure all parties sign the form to acknowledge their agreement.
Notarization requirements for this form
In most cases, this form does not require notarization. However, some jurisdictions or signing circumstances might. US Legal Forms offers online notarization powered by Notarize, accessible 24/7 for a quick, remote process.
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Make edits, fill in missing information, and update formatting in US Legal Forms—just like you would in MS Word.
Download a copy, print it, send it by email, or mail it via USPS—whatever works best for your next step.
Sign and collect signatures with our SignNow integration. Send to multiple recipients, set reminders, and more. Go Premium to unlock E-Sign.
If this form requires notarization, complete it online through a secure video call—no need to meet a notary in person or wait for an appointment.
We protect your documents and personal data by following strict security and privacy standards.
Common mistakes
- Neglecting to specify a fair market value or dollar figure.
- Failing to obtain signatures from all parties.
- Ignoring local laws that may affect the purchase option.
Why use this form online
- Convenience of downloading and completing the form at your own pace.
- Editable templates that can be customized to your situation.
- Access to professionally drafted documents to ensure legal compliance.
Key takeaways
- Tenants can secure a purchase option after a specified lease term.
- Ensures a transparent process for purchasing at fair market value or a set price.
- Important for tenants seeking an avenue to property ownership.
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FAQ
The Basic Structure of a Lease Purchase In a lease purchase contract, the buyer and seller agree to a lease period followed by sale of the property when the lease ends. This type of agreement combines both a lease and a purchase with the tenant/purchaser securing the option to purchase the house.
Typically, when you're ready to make an offer, you'll meet with your real estate agent and complete the Offer to Purchase form together. You may also want to write your offer with the help of an attorney. Although you can prepare an offer yourself, it's not recommended.
The names and addresses of both the seller and buyer. The offered purchase price and address of the property. The settlement date when the buyer intends to pay and obtain the title. Details of how you wish to pay the deposit, whether it be cash or by transfer.
The identity of the buyer and seller. A description of the property being purchased. The purchase price. The terms as to how and when payment is to be made. The terms as to how, when, and where the goods will be delivered to the purchaser.
A lease-option-to-buy arrangement can be a solution for some potential homebuyers, but it's not right for everyone. If you're not certain that you're going to be able to purchase the rental home at the end of the lease period, you might be better served with a standard rental agreement.
Declare your offer. Express your interest in making an offer to the estate agent or seller, and don't be afraid to go below the asking price. Make a list. Do the paperwork. Sign and wait.
In the sales contract write down the amount of gift. If the property is worth $200,000.00 and you are selling the property for $150,000.00 the Gift of Equity is for $50,000.00. Include a clause stating: The purchase price is $200,000.00 and the seller will credit the buyer $50,000.00 as a Gift of Equity.
Expiration date of the offer. Purchase price. Initial deposit. Down payment amount. Financing terms. Required home inspection. Contingencies. Warranties.
Lease-option contracts give you the right to buy the home when the lease expires, while lease-purchase contracts require you to buy it. You pay rent throughout the lease, and in some cases, a percentage of the payment is applied to the purchase price.
