Options (In a Lease)

Options, found in a lease, provide a buyer with the opportunity to buy a property in a given set of time after making a down payment. The buyer, however, does not have a legal obligation to buy the property. This type of real estate transaction is part of an overall lease agreement. The tenant leases the property from the property owner. A provision in that lease agreement gives the tenant the option to buy the property before a set date. The tenant (or potential buyer) can exercise that option before the date or let it lapse with no penalty. Options in a lease can happen as part of a residential, commercial, or industrial lease. It is different from a lease purchase where the tenant becomes legally obligated to buy the property by a date given in the contract.