Lease to Purchase Agreement Template

This Lease to Purchase Agreement (referred to as “Lease”) is made effective as of [Document.CreatedDate]​(referred to as “Effective Date”) by and between [Landlord.FirstName][Landlord.LastName] (referred to as “Landlord”) and [Tenant.FirstName][Tenant.LastName] (referred to as “Tenant”).

This Lease-to-Purchase Agreement is subject to the terms and conditions stated below. The Landlord and Tenant (combined, referred to as “Parties”) agree as follows:

Premises

The Landlord agrees to lease the residential property located at [Property.Address] (referred to as the “Premises”) to the Tenant.

Description of Property: (Brief description of property)

Lease Term

The Lease term will begin on [Document.CreatedDate] and will end on [Document.ExpirationDate]​.

If the Tenant fails to exercise the option to purchase by such time and date, the option will automatically terminate, and the Landlord will be entitled to retain the non-refundable considerations stated below.

Lease Payments

The Tenant shall pay the Landlord monthly installments of $(Enter amount), payable in advance on the first (1st) day of each month.

Of this amount of $(Repeat monthly installment), $(Enter amount) will contribute to the down payment should the Tenant choose to execute the Option to Purchase.

Lease payments shall be made to the Landlord at:

(Enter where and how payments should be made)

Security Deposit

The Landlord will require the Tenant to pay a one-off security deposit of $(Enter amount) for the lease of the Premises.

If the Tenant takes the Option to Purchase at the end of this Lease, the security deposit will be credited towards the purchase price of the property.

If the Tenant does not take the Option to Purchase and vacates the Premises at the end of the Lease Term, the security deposit will be returned to the Tenant within (Enter number) days, less any damages beyond normal wear and tear.

Option to Purchase

The Tenant, upon satisfactory performance of this Lease, shall have the option to purchase the residential property described herein for a purchase price of $(Enter number) , provided that the tenant timely executes the option to purchase and is not in default of the Lease agreement.

Thereafter, each of the parties shall promptly execute any and all further instructions or other documents, including a Sale Agreement, that may be reasonably required for the purchase of the residential property.

The Landlord shall credit towards the purchase price at closing the sum of $(Enter number) from the security deposit and $(Enter amount) from each monthly lease payment that the Tenant made on time.

Notice Required to Exercise Option

To exercise the Option to Purchase, the Tenant must deliver to the Landlord a written notice of the Tenant’s intent to purchase not less than (Enter number) days before the expiration of the Lease Term.

In addition, the written notice must specify a valid closing date. The closing date must occur before the original termination date of the Lease Agreement.

Option Consideration

Non-refundable option consideration in the amount of $(Enter amount) paid by the Tenant as consideration for this Option to Purchase Agreement shall be credited to the purchase price at closing if the tenant timely exercises the option to purchase.

If the Tenant doesn’t exercise the option to purchase, the Tenant shall forfeit the non refundable option consideration.

Exclusivity of Option

This Option to Purchase Agreement is exclusive, non-assignable, and solely exists for the benefit of the named Parties above.

Should the Tenant attempt to assign, convey, delegate, or transfer this option to purchase without the Landlord’s express written permission, any such attempt shall be deemed null and void.

Closing and Settlement

The Tenant agrees that closing costs, including any points, fees, and other charges required by the third-party lender, are the sole responsibility of the Tenant.

The only expense related to closing costs apportioned to the Landlord shall be the pro-rata share of the property taxes due at the time of closing, for which the Landlord is solely responsible.

Use of Premises/Absences

The Tenant shall occupy and use the Premises as a residential dwelling.

The Tenant shall notify the Landlord of any anticipated extended absence from the Premises no later than the first (1st) day of the extended absence.​

Pets

Pets shall be:

• ​Allowed on the Premises

• Allowed on the Premises, but limited to (Add any limitations)

• Not allowed on the Premises

Property Insurance

Landlord and Tenant shall each be responsible for maintaining appropriate insurance for their respective interest in the Premises.

The Tenant shall be required to maintain renters insurance of no less than $(Enter amount).

Damage Cause by Tenant

If any damage to the Premises is caused by their act or neglect, the Tenant will be responsible for all repairs at their own expense, including damage to screens and windows where the Landlord’s insurance does not cover the same.

Maintenance

The Landlord shall be responsible for maintaining the Premises in good order at all times and performing repairs to satisfy any implied warranty of habitability, except the Tenant shall be responsible for (Enter tenant’s responsibilities).

The Tenant must notify the Landlord within twenty-four (24) hours of any condition requiring maintenance.

Utilities and Services

The Landlord shall be responsible for all utilities and services in connection with the Premises.

Destruction or Condemnation of Premises

If the Premises is damaged or destroyed by an unforeseen force majeure event, such as fire or natural disaster, to the extent that the enjoyment of the Premises is substantially impaired, the Landlord, in their sole discretion, may elect to repair the premises or terminate this Lease upon 30 days written notice to the tenant.

If the Premises is condemned or cannot be repaired, this Lease will terminate upon 20 days written notice by either party.

Late Payments

For any payment that is not paid within (Enter number) days after its due date, the Tenant shall pay a late fee of $(Enter amount) or as otherwise provided by applicable law.

Holdover

If the Tenant maintains possession of the Premises for any period after termination of this Lease (referred to as “Holdover Period”), the Tenant shall pay to the Landlord lease payment(s) during the Holdover Period at a rate equal to 150% of the most recent rate preceding the Holdover Period.

Such holdover shall constitute a month-to-month extension of this lease.

Remodeling or Structural Improvements

The tenant shall have the obligation to conduct any construction or remodeling, at the Tenant’s expense, that may be required to use the Premises as specified above. The Tenant may also construct such fixtures on the Premises, at the Tenant’s expense, that approximately facilitate its use for such purposes.

Access by Landlord to Premises

Subject to the Tenant’s consent, which shall not reasonably be withheld, the Landlord shall have the right to enter the premises to make inspections, provide necessary services, or show the unit to prospective buyers, mortgagees, tenants, and workers.

The Landlord shall provide the tenant with (Enter number) hours notice before entering the Premises.

​However, the Landlord does not assume any liability for the care or supervision of the Premises.

As provided by law, the Landlord may enter the Premises without the Tenant’s consent in an emergency.

Dangerous Materials

The Tenant shall not have or keep on the Premises any article or thing of a dangerous, flammable, or explosive character that might substantially increase the danger of fire on the Premises or that might be considered hazardous by a responsible insurance company unless prior written consent of the Landlord is obtained and proof of adequate insurance protection is provided by the Tenant to the Landlord.

Title

The Landlord agrees to deliver, and the Tenant agrees to accept, the title to the Premises subject only to (a) a lien for taxes and assessments levied against the Premises, (b) any covenants, conditions, restrictions, easements, rights, rights-of-way of record, and (c) such other exceptions as the Landlord and the Tenant approve in writing.

The Landlord shall deliver to the Tenant a preliminary title report within 30 days after the Tenant exercises the Option to Purchase.

Financial Disclaimer

The Parties acknowledge that it is impossible to predict the availability of obtaining financing towards the purchase of this property. Obtaining financing shall not be held as a condition of performance of this Option to Purchase Agreement. The Parties further agree that this Option to Purchase Agreement is not entered into in reliance upon any representation or warranty made by either party.

Remedies Upon Default

If the Tenant defaults under this Option to Purchase Agreement or the Lease Agreement, then in addition to any other remedies available to the Landlord in accordance with [Landlord.State] law, the Landlord may terminate this Option to Purchase by giving written notice of the termination.

If terminated, the Tenant shall lose entitlement to any refund of rent or option consideration.

For this Option to Purchase Agreement to be enforceable and effective, the Tenant must comply with all terms and conditions of the Agreement.

Acknowledgments

The Parties are executing this Option to Purchase Agreement voluntarily and without any duress or undue influence.

The Parties have carefully read this Option to Purchase Agreement and have asked any questions needed to understand its terms, consequences, and binding effect and fully understand them and have been given an executive copy.

Assignability/Subletting

The Tenant may not assign or sublease any interest in the Premises, nor assign, mortgage, or pledge this Lease, without the prior written consent of the Landlord, which shall not be unreasonably withheld.

Notice

Noticed under this lease shall not be deemed valid unless given or served in writing and forwarded by mail, postage prepaid, addressed to the party at the appropriate address set forth below.

Such addresses may be changed from time to time by either party providing notices as set forth below.

Notices mailed in accordance with these provisions shall be deemed received on the third day after posting.

Governing Law

This lease shall be construed in accordance with the laws of the State of [Landlord.State].

Entire Agreement

This Lease contains the entire agreement of the Parties, and there are no other promises, conditions, understandings, or other agreements, whether written or oral, relating to the subject of this Lease.

This Lease may be modified or amended in writing if the writing is signed by both Parties.

Severability

If any portion of this Lease shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable.

If a court finds that any provision of the Lease is invalid or unenforceable but that limiting such provision would make it valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.

Severability

The failure of either party to enforce any provisions of the Lease shall not be construed as a waiver or limitation of that party’s right to subsequently enforce and compel strict compliance with every provision of this lease.

Appendices

• Residential Lease to Purchase Inspection Checklist

• Lead-based paint disclosure

Binding Effect

The provisions of the Lease shall be binding upon and inure to the benefit of both Parties and their respective legal representatives, successors, and assigns.