Lease with Option to Buy

Last modified December 11, 2021

Larger Real Estate companies that specialize in Lease with the Option to Buy, also known as Rent with the Option to Buy typically have separate Option to Purchase or Option to Buy documents apart from the Rental Agreement. One reason is because these large compay's are reputation sensitive with regard to public opinion, such as Google reviews. These larger Companies do not want any term misunderstandings between the themselves and the Tenants. This is also one the reasons why these institutional Landlords typically don't allow for part of the Tenants rent to be used a part of a Down Payment for an Instituional Lender. Lending Guidelines are always changing, and this Seller credit may not be allowed in the Mortgage Lending guidelines. If a portion of a Tenants rent would go towards the Rent to Own or Rent with Option to Buy agreement, then that money should legally be Escrowed into a separate bank account that is known as an Escrow account or Trust account. This is an extra step for the Institutional Landlord that they normally don't want as a potential Legal dispute. The terms Rent with Option to Buy, Lease with Option to Buy, or Lease with Option to Purchase mean the same thing, it just depends how the Rental Agreement and Option to Buy is used in that Agreement. The Agreement should consistantly use the same wording throughout the Option Agreement.