Lease Option Agreement with Buyers

Posted on March 3, 2014 by global

Use these when installing a tenant buyer on a sandwich lease ACTS deal, or house you own.

Revised 09/28/2017

Real Property Possession and Lease Agreement

Real Estate Purchase Option Agreement

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54 Responses to Lease Option Agreement with Buyers

  1. David Woodside says:
    April 20, 2014 at 10:11 pm

    Yes! Thanks for correcting this form. I thought there was something wrong with the other version because it had an option exhibit in it, whereas this form was apparently originally intended to install a Tenant/Buyer only, without giving an option. Looks correct now.

    Reply
  2. Marc Bazemore says:
    June 11, 2014 at 1:42 pm

    Where would find the refundable option deposit!?!

    Reply
  3. Jason Roberts says:
    August 1, 2014 at 1:01 am

    Thank you for walking me through the contract Ron, it helped a great deal!

    Reply
  4. Carlos Vera says:
    August 23, 2014 at 5:55 am

    DO you use this one if you want to do ACTS then find a buyer, assign the lease to the buyer get your assignment fee and get out? Please let me know.

    Reply
  5. Stephon Overton says:
    September 16, 2014 at 7:13 pm

    Where on this form does it give a space to write what the purchase price will be? I am looking for an area to put “The purchase price will be the loan balance at time of purchase”.

    Reply
  6. Tom Payton says:
    February 18, 2015 at 4:35 pm

    Hope to be using very soon!

    Reply
  7. Jeffrey Richman says:
    July 28, 2015 at 9:42 am

    Hi Ron,

    I am now emailing this to my attorney to see if it conforms with North Carolina law and if it doesn’t, what needs to be done so that it does.

    Thank you!

    Reply
  8. Lajon Jordan says:
    December 10, 2015 at 4:01 pm

    I only see the lease portion of this document where is the option portion?

    Reply
  9. Lisa Parker says:
    December 28, 2015 at 8:14 pm

    Can you explain who signs where on the signature page (6)? Does there need to be a witness or notary signature on this page?

    Reply
  10. Darren Dixie says:
    February 11, 2016 at 8:43 am

    thanks again for this document. I’m up filling it in for a closing this week.

    Reply
  11. Jeff Wiresinger says:
    September 15, 2016 at 10:33 pm

    Got my first DEAL the paper has me a little on the edge !!! 🙂

    Reply
  12. Walter Petersen says:
    November 28, 2016 at 1:11 pm

    This form is missing the whole section regarding the lease option! Is there a corrected version or another form that should be used for that section.

    Reply
  13. Jason Briggs says:
    January 11, 2017 at 7:51 pm

    Has the missing section regarding the lease option been resolved?

    Reply
  14. Jason Briggs says:
    January 11, 2017 at 7:52 pm

    Where do I find it?

    Reply
  15. Linda Broadway says:
    January 31, 2017 at 11:48 am

    I also need the location of the documents needed for the option to purchase. If anyone has located the complete version please let me know.
    Thanks.

    Reply
  16. Nicholas Wheeler says:
    February 17, 2017 at 1:37 am

    If we fill out the Initial Term on Exhibit A which puts a start date and end date for the lease period, do we add an addendum for the dates the tentant buyer actually get his/her term period? How does this work?

    Reply
  17. Dan Nicholson says:
    March 3, 2017 at 5:19 am

    This lease agreement mentions an option agreement four different times. It was my understanding that the option agreement should never be mentioned in the lease agreement with buyers. The reason being, to prevent a judge from tying the purchase option to a tenant’s lease agreement. Why can’t these “breach” / “conditions” clauses which refer to an option agreement be totally contained within the option agreement, with vague clauses regarding compliance with all the terms of any other currently existing agreements with the Lessor, including any leases? The option agreement would not specifically mention the buyer’s lease apreement.

    Reply
    • Mark Burton says:
      April 25, 2017 at 1:04 pm

      I’ll be amending my copy of this but I will include the “breach” / “conditions” clauses in both my Lease and my Option. Then I’ll completely remove the 4 “option agreement” references from this doc. Dan’s right, I’ve heard Ron talk about the whole “separation of Lease and Option” thing many times over the yeas. And I’ve been reading that judges in many states are looking a lot harder at these kinds of agreements these days.

      Reply
  18. Ijaz Mirza says:
    April 3, 2017 at 8:35 pm

    First time going through this.

    Reply
  19. Jazze Mokoena says:
    August 10, 2017 at 2:57 pm

    Where can I find the lease to buy option form?

    Reply
    • Matthew Holsclaw says:
      November 4, 2020 at 9:17 pm

      There should be a link at top of this page. However, II find it easier to search for each respective document in the search bar at the top of the website. Even if I use a key word, the result have been readily available.

      Reply
  20. Theresa Pollard says:
    January 9, 2018 at 9:21 pm

    I’m seeing all kinds of questions about the separation of the lease agreement and option contract. Having done one of these already, and having to appear in court to evict said tenant-buyer, I saw firsthand the scrutinization the attorney and judge gave my documents. Fortunately, I HAD used separate documents, so the option contract never came into question. I am also wondering if there is a separate contract we are to use for the option part of it? I’m not seeing it shown in the resources, thus far.

    Reply
  21. Nick and Kristen Rosu says:
    February 6, 2018 at 9:18 pm

    Teresa P.
    Separate forms. Mistake us newbies make is that the option fee should be high enough as to serve as a “motivator”, for tenant, either to go in to a deal, or thinking and once in a deal to perform – buy the house.
    The word “option”, should never be incorporated in the rental agreement.

    Reply
  22. Joe Valazuolo says:
    July 19, 2018 at 8:04 pm

    I dont understand why the Real Property Possession and Lease Agreement has several sections where it refers to the option agreement. I was under the impression that is just needs to be a lease or rental agreement and must not refer to the option agreement.

    Does anyone have a corrected version of this?

    Reply
    • Bella Chartrand says:
      July 21, 2018 at 6:53 pm

      I just read the agreement and can’t see where it refers to the option agreement. I see the option deposit is only mentioned in the separate ‘REAL ESTATE PURCHASE OPTION AGREEMENT’…

      Reply
  23. Joe Valazuolo says:
    July 30, 2018 at 7:05 am

    Open the above word document and do a word find for “option”.

    Section 8:

    It is a condition of this Agreement and partial and valuable consideration for the Option Agreement that Lessee be responsible for all maintenance to the premises, including, without limitation, after the aforesaid thirty (30) day warranty period the heating, cooling, plumbing and electrical systems.

    11.10 Vehicles. Vehicles shall NOT be parked on the lawn at any time. Non-operative vehicles are not permitted on the premises. Any such non-operative vehicle may be removed by lessor at the expense of lessee, for storage or public or private sale, at lessor’s option, and lessee shall have no right of recourse against lessor thereafter.

    21. ATTORNEYS’ FEES AND COSTS: ARBITRATION. In the event of any controversy or claim concerning this Agreement or the Option Agreement the prevailing party therein shall be entitled to recover from the other party, all its costs and expenses, including attorney’s fees.

    36. ACCURACY AND RESPONSIBILITY. Lessor relied materially upon the information contained in lessee’s Application in drafting this Agreement and the Option Agreement and all Exhibits attached hereto. Lessee warrants the Lease Application is true, complete and accurate. If the Lease application is false, lessor may terminate this Agreement and the Option Agreement immediately. Lessor shall be entitled to retain any improvements to the premises, and performance fee and any prepaid rents. If lessor exercises any option or right to terminate this Agreement, all persons and possessions are to be removed from the premises within 24 hours of notification by lessor. Lessee further agrees to indemnify lessor for any damages to the premises and waives any right of “set-off” and same shall be forfeited. This Agreement is between lessor and lessee who shall always be jointly and severally liable for the performance of every understanding and promise made herein with and to lessor.

    Reply
  24. David says:
    December 31, 2018 at 1:17 pm

    Very helpful documents !

    Reply
  25. Luis Cruz says:
    March 5, 2019 at 8:49 pm

    Adding this one to my archive. Thanks Ron!

    Reply
  26. Chris Cannon says:
    March 28, 2019 at 8:56 am

    Is there a particular place in the agreement that the draw schedule for reimbursement of materials should be placed?

    Reply
  27. Ryan Garrison says:
    May 6, 2019 at 3:20 pm

    Section 44 of lease….what do you put in the __________contract area? Binding?

    Reply
  28. Dorothy Thompson says:
    June 6, 2020 at 3:11 pm

    Great documents, Thanks Ron

    Reply
    • Tina Collins says:
      July 21, 2020 at 3:09 pm

      Dorothy can you please call me (719)306-5760 – I would like to talk with you about the lease option. Tina Collins

      Reply
  29. Eric Snyder says:
    September 1, 2020 at 6:53 pm

    Great document.

    Reply
  30. Fj Jalil says:
    October 6, 2020 at 8:47 pm

    Exactly what was needed at exactly the right time. Thanks team RL!

    Reply
  31. Rod McMasters says:
    October 12, 2020 at 11:22 am

    Thanks so much R.L..

    Reply
  32. Ashley Atwood says:
    October 29, 2020 at 2:50 pm

    I’m getting all these saved to my files. Thanks for the comments everyone. I’ll be makeing sure the lease agreement doesn’t mention the option to buy and that the two contracts are very separate when I’m selling with the L/O.

    Reply
  33. Matthew Holsclaw says:
    November 4, 2020 at 9:27 pm

    I’ve noticed on several videos that the option fee is credited towards the purchase price, when/if the tenant pays you (the seller) off. I’ve had other mentors say that the option fee should not be voiced as a credit or down payment. Because, in the event the tenant/buyer stopped paying rent. A judge would consider the option fee as a down payment and the tenant/buyer has equitable interest in the property. Then you (the seller) would have to foreclose on the property. Thoughts?

    Reply
  34. Paul Martin says:
    December 7, 2020 at 3:49 am

    Thanks for this.

    Reply
  35. Marvin Lipper says:
    April 24, 2021 at 12:13 pm

    Do you have a lease option agreement with buyers specifically for the state of North Carolina? Or how do I modify or add to the purchase and lease option agreement given here that would conform to North Carolina requirements?

    Reply
  36. Ashley Atwood says:
    August 27, 2021 at 12:08 pm

    Got it. Sending to my new AZ attorney to prepare for my first LPO tenant in a Sandwich Lease Option!

    Reply
  37. Jerry Owens says:
    March 11, 2022 at 2:51 am

    Just created my first on Lease/Option agreement! Thanks for the form, and for the training that got me this far!

    Reply
  38. Sally Struss says:
    May 21, 2022 at 4:30 pm

    Unable to access the form. Using chrome

    Reply
  39. Kevin Williams says:
    October 5, 2022 at 6:36 am

    I don’t see anything on the form about the non-refundable option deposit.

    Reply
  40. Kevin Williams says:
    October 5, 2022 at 6:40 am

    Never mind! I see it! Lol! ‍♂️

    Reply
  41. Robert Straker says:
    May 31, 2023 at 10:17 am

    Hello,

    I agree with Kevin, Nothing about non-refundable deposit.

    Bye for now,
    Robert

    Reply
  42. Sharon Collins says:
    April 12, 2026 at 2:37 pm

    Where are the responses to the questions that are asked above?

    Reply

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