LEASE OPTION AGREEMENT
AGREEMENT WITH OPTION TO PURCHASE REAL ESTATE (hereinafter referred to as
the Lease/Option) is made on this _________ day of ____________________________,
20_______, by and between the following parties:
at______________________________________________________ (hereinafter referred
to as the Tenant/Buyer); and
at______________________________________________________ (hereinafter referred
to as the Landlord/Seller).
In consideration of the mutual
promises and covenants herein, the
parties hereby agree as follows:
Landlord/Seller agrees to lease, and the Tenant/Buyer agrees to rent the real
property and improvements, located at:
as more fully described as follows:
referred to as the "Property".)
TERM: The term of this
Lease/Option shall be for a period of ___________ months commencing on
_______________________, 20___________, and ending on
__________________________________. The term will be automatically extended for
__________________ periods of ______________ months, unless the Tenant/Buyer
gives notice to the Landlord/Seller of its intent to terminate this
Lease/Option, by mailing a written notice to the last provided address of the
Landlord/Seller, or until such time as Tenant/Buyer exercises its option to purchase
the Property. Liability for payment
will not extend beyond notice to terminate this agreement.
POSSESSION: Possession shall
be delivered by keys and physical possession given to the Tenant/Buyer on
RENT: Tenant/Buyer agrees to
pay the lender of Landlord/Seller’s current mortgage or trust deed, the sum of
$_________________ per month, with the first payment beginning
_____________________________ as rent for the Property, for the term of this
Lease/Option, and during any extension thereof. All rental payments shall be due and payable in advance of
the 10th day of each and every month. An
amount equal to $__________________ for each month in which rent was paid, shall
be credited to the Tenant/Buyer and applied to the purchase price of the
Property in the event that the Tenant/Buyer exercises its option hereunder.
OPTION TO PURCHASE: The
Tenant/Buyer, as part of the consideration herein, is hereby granted by the
Landlord/Seller the exclusive right, option, and privilege of purchasing the
Property at any time during the term of this Lease/Option or any extension
LIQUIDATED DAMAGES: Should
Tenant/Buyer default on this agreement, Landlord/Seller shall keep all monies
paid as liquidated damages.
COVENANTS OF TENANT/BUYER:
Commencing with entering the term of this agreement, including extensions, the
Tenant/Buyer hereby covenants and agrees as follows:
That the Tenant/Buyer will pay all utility charges and bills, including,
but not limited to water, sewer, gas, oil, and electric, which may be assessed
or charged against the Property.
That the Tenant/Buyer will not use the Property for any unlawful purpose
and that the Tenant/Buyer will conform to and obey all laws, ordinances, rules,
regulations, requirements and orders of all Federal, State, and Local
governmental authorities, agencies, departments, bureaus, boards or officials,
respecting the use of the Property; and
That the Tenant/Buyer will surrender and deliver up the Property, at the
end of the term or any extensions thereof, should the option herein not be
exercised, in as good order and condition as the same now exists, reasonable use
and natural wear and tear excepted.
COVENANTS OF THE LANDLORD/SELLER:
The Landlord/Seller hereby covenants and agrees as follows:
That the Landlord/Seller shall pay for and maintain fire and extended
coverage insurance on the Property in minimum amount of
$__________________________. The Tenant/Buyer shall be named as an additional
insured or loss payee on the insurance policy and copy of which shall be
provided to Tenant/Buyer.
That the Tenant/Buyer is entitled to the quiet enjoyment of the Property
without any interference or interruption by Landlord/Seller or its
COSTS OF IMPROVEMENTS: In the
event the Tenant/Buyer exercises the option to purchase set forth in paragraph
4, above, and through no fault of the Tenant/Buyer, the Landlord/Seller fails to
convey said Property to Tenant/Buyer in accordance with the terms of this
Lease/Option, the Tenant/Buyer, in addition to any other rights which
Tenant/Buyer may have in law or equity for the enforcement of Tenant/Buyer’s
option to purchase, shall be entitled to reimbursement for the cost of all
repairs, maintenance, and improvements.
FURTHER ENCUMBRANCES: The
Landlord/Seller hereby warrants the total of the leases, options, mortgages,
liens, and any other encumbrances against the Property, whether of public record
or not, are as follows:
A first mortgage in favor of___________________________________ in the
approximate amount of $____________________________________.
Current taxes for_____________________________________________________ in
the amount of $___________________________ due
Other liens (specify):
The Landlord/Seller shall not
lease to any other third party, nor to assign, sell, option, transfer, pledge,
or otherwise to convey any or all rights or interests had by Landlord/Seller in
the Property or in this Lease/Option, nor to further encumber the Property nor
allow the same to occur. Violation
of this paragraph shall be considered a material breach of this Lease/Option.
The Landlord/ Seller further agrees to keep all mortgages, liens, taxes,
or other encumbrances on the Property, current and in good standing,
Tenant/Buyer shall have the right to make payment on same in the event that
Landlord/Seller becomes delinquent or otherwise defaults on such payments, and
Tenant/Buyer may at its option either reduce its monthly rent in the amount of
the payments, or subtract the amount of the payments from the balance due
Landlord/Seller at closing of the sale of the Property.
RIGHT OF ASSIGNMENT: The
Tenant/Buyer may sublet the Property, and/or assign, sell, transfer, pledge, or
otherwise convey any or all rights or interest which the Tenant/Buyer may have
in the Property or in this Lease/Option. Any
such assignments will release original Tenant/Buyer from any and all liability
and substitute assignee in his/her or its place.
MAINTENANCE AND REPAIRS: The
Tenant/Buyer accepts the Property “as is” on the date of execution of this
Lease/Option except for items listed in paragraph 14.
As of the effective date, the Tenant/Buyer shall be responsible for all
maintenance and repair upon said Property, both interior and exterior.
The Tenant/Buyer shall have the right to make such repairs, maintenance,
and improvements as Tenant/Buyer shall deem necessary, proper or desirable.
The Tenant/Buyer shall pay the costs of all such improvements, except
that any electric, plumbing, heating or cooling system that is not in workable
condition at the inception of this Lease/Option will be repaired by the
Landlord/Seller at its expense within sixty (60) days notice from Tenant/Buyer.
If the Landlord/Seller refuses to make such repairs, Tenant/Buyer will
have the option of either voiding this agreement by written notice to the
Landlord/Seller or making such repairs and, (a) receiving a reimbursement from
the next monthly payment or payments due the Landlord/Seller or, (b) receiving a
credit against the purchase price plus interest at 10% per annum from date of
BINDING AGREEMENTS: The
parties hereto agree that this Lease/Option comprises the entire agreement of
the parties and supersedes all prior written or oral agreements,
representations, warranties, negotiations, or understandings.
This Lease/Option may not be amended except in a writing executed by all
the parties hereto. The parties further represent and warrant that they have not
relied on any representations, warranties or statements as an inducement to
entering this Lease/Option other than what is expressly written herein. This
Lease/Option shall be binding upon the parties, their heirs, executors,
administrators, personal representatives, successors, or assigns.
The Landlord/Seller will complete the following by________________________ or
this Lease/Option will become null and void and all monies paid by Tenant/Buyer
will be immediately refunded by Landlord/Seller or, at Tenant/Buyer's option,
Tenant/Buyer may accept the Lease/Option and completed the items listed below, and
the cost of same will be recovered as provided for in paragraph 12:
TITLE SEARCH will be ordered immediately by the Tenant/Buyer.
This cost will be borne by the Tenant/Buyer unless it is discovered that
Landlord/Seller has unmarketable title in which case the Landlord/Seller will
reimburse Tenant/Buyer to cost of the search.
If the title is unmarketable the Tenant/Buyer will then have the option
to void this agreement or proceed as agreed herewith.
OPTION PURCHASE TERMS
PRICE AND TERMS: The
Tenant/Buyer agrees to pay for said Property the sum of
less any sums for which the Tenant/Buyer is entitled to claim as reimbursement
or offset in accordance with this Lease/Option; the net sum to be paid in cash,
certified check, or cashier's check at closing.
IN THIS PURCHASE: The Property shall also include all land, together with
all improvements thereon, all appurtenant rights, privileges, easements,
buildings, fixtures, heating, electrical, plumbing, air conditioning fixtures
and facilities, window shades, venetian blinds, awnings, curtain rods, screens,
storm windows and doors, affixed mirrors, wall-to-wall carpeting, stair
carpeting, built-in kitchen appliances, bathroom fixtures, radio and television
aerials, landscaping and shrubbery, water softeners, garage door openers and
operating devices, and all utility or storage buildings or sheds, range and
refrigerator. The Property shall
also include the following items: _________________________________
The Landlord/Seller shall convey marketable title to the Property with the above
described inclusions, by General Warranty Deed free, clear, and unencumbered
except existing mortgages, restrictions, and easements of record shown in
The deed shall be delivered and the purchase money shall be paid at a time
and place of Tenant/Buyer's choice, no later than 60 days after notification to
the Landlord/Seller of the Tenant/Buyer’s exercise of the option.
AND PRORATIONS: The following items shall be prorated the Landlord/Seller
and the Tenant/Buyer as of date of closing: (a) All real estate taxes and
assessments; (b) Interest on encumbrances assumed or taken over by Tenant/Buyer
with both parties having responsibility for such items as follows:
Landlord/Seller will pay:
Tenant/Buyer will pay:
While this Lease/Option is in effect, the Landlord/Seller shall maintain fire
and extended coverage upon the Property, and immediately convert the owner
occupied (if applicable) policy to a non-owner occupied policy.
In the event of the entire or partial loss, damage or destruction of the
Property, the Tenant/Buyer may at its option (a) proceed with the closing and
accept the insurance proceeds for said damage, or (b) declare this Lease/Option
null and void, releasing both parties from any obligations hereunder, except for
the return of reimbursable expenses previously paid by Tenant/Buyer which
amounts shall become immediately due and payable from the insurance proceeds. Tenant/Buyer
shall be responsible for obtaining fire and extended coverage insurance on the
Property effective on the closing date.
In the event that any legal proceeding is brought to enforce any
right or obligation under this Lease/Option, the parties each agree to waive
their right to a jury trial. In
addition, the prevailing party shall recover its reasonable court costs and
attorney fees from the non-prevailing party.
IN WITNESS WHEREOF,
the parties hereto, have set
their hands to this Lease/Option on this ________________ day of
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