FREE 5+ Lease to Own Contract Samples in PDF | MS Word | Apple Pages | Google Docs

With the volatile and unpredictable housing market these days, being a homeowner can be difficult to achieve if you don’t have the financial security to afford to purchase and own a home. You will need a mortgage to finance the purchase of a new house and getting a mortgage is also a difficult process since you need to have a good credit score and cash for a down payment. Without these, then owning a home can be much more difficult. However, there is an alternative that will lessen the burden of buying a home: a rent-to-own arrangement exists. This process is where you rent a home for a certain amount of time, with the option to buy it before the lease expires. To engage in this you need to agree to a Rent-to-own contract, which usually consists of two parts: a standard lease agreement and an option to buy. This article will guide you on what this type of contract is, how it is made, and how the whole arrangement is done.

5+ Lease to Own Contract Samples

1. Lease to Own Contract

2. Sample Lease to Own Contract

3. Simple Lease to Own Contract

4. Lease to Own Contract Example

5. Basic Lease to Own Contract

6. Professional Lease to Own Contract

What is a Rent-to-Own Lease Contract

A rent-to-own lease contract is a written agreement that includes an option for the tenant to purchase the property from the landlord. This arrangement is done when landlords want to collect rent on their property and eventually sell it to the tenant at a negotiated price. This type of arrangement is advantageous for both parties since it makes selling the property easier for the landlord since they know who will be the owners of the property and the tenant has already moved into the property.

What to Include in a Lease-to-Own Contract 

1. Lease period

The length of the lease, which is the period of the lease when the lease will start and end, informs the tenant when they will be able to buy the property, which is usually at the end of the lease. In some contracts, the landlord and tenant will agree that the lease end date will also be the purchase date of the property. If this is the case in the contract, the tenant will need to have a mortgage before the end of their lease to avoid breaching the contract.

2. Price of Property

The price is usually already set by the landlord before the tenant and landlord sign the contract. To clarify this concern, the landlord and tenant should discuss any situations or instances that may affect the value of the home, especially during the lease term. It’s usually up to the agreement between the two how the pricing will be set. Having good and constant communication can help avoid any disagreements with the pricing of the property.

3. Option Fee

The agreement must need to include an option fee clause, that will legally let the landlord sell their property to the tenant, even if the landlord changes their mind. The option fee is paid by the tenant to secure the option to buy the property at the end of the lease. One downside with option fees is that they are non-refundable.

4. Rent Credit

The rent credit is a monthly fee that goes toward the tenant’s down payment if the tenant wants to buy the property. This fee is also non-refundable, so if the tenant changes their mind, the landlord keeps the money. If the tenant buys the property at the end of the lease term, then they will get the rent credits back.

FAQs

Once you’re done drafting the contract, make sure to review it for any spelling and grammatical errors and inaccurate information that you may accidentally include. Discuss the contract with the other party and reach a mutual agreement with its terms first before you go ahead and sign it. To help you get started making the contract, download our free sample templates above to use as your guide!