Docstoc Legal Agreements
This Lease to Purchase Option Agreement is used where a lease of real property offers the
lessee an option of purchasing the premises at a specified time, for a pre-determined price.
The agreement requires the lessee to provide the lessor with option consideration, similar
to a down payment, which secures the property for purchase at a later date. The lessor is
prohibited from listing the property for sale during the contract period. If the lessee wishes
to exercise the option, he or she must notify the lessor, and a portion of the monthly lease
payment is applied to the purchase price. This agreement is useful for property owners
located in South Dakota to sell property to buyers with bad credit or who cannot obtain
home financing.
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LEASE TO PURCHASE OPTION AGREEMENT
This Lease to Purchase Option Agreement (“Lease”) is made on ____ [Month] ____ [Date],
20____ by and between ________________________________ [Instruction: Insert the name
of Lessor](hereinafter termed as the “Lessor”) and ________________________________
[Instruction: Insert the name of Lessee](hereinafter termed as the “Lessee”). The Lessor and
the Lessee may individually be referred to as the “Party” and collectively be referred to as the
“Parties”.
WHEREAS, the Lessor is the sole owner of certain real property being, lying and situated at
[Instructions: Insert address of Premises]
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(hereinafter termed as the “Premises”) agreed upon the following terms and conditions:
1. Option to Purchase. In consideration of the Lessee meeting all obligations as stated herein
under this Lease, the Lessor hereby grants the Lessee an “Option to Purchase”.
2. Lease Term. Lessee understands that time is of the essence in this Lease. The Lease will
start on ____ [Month] ____ [Date], 20____ and will end on ____ [Month] ____ [Date],
20____.
3. Notice Required Exercising Option. To exercise the Option to Purchase, the Lessee must
deliver to the Lessor written notice of Lessee’s intent to purchase. In addition, the written
notice must specify a valid closing date. The closing date must occur before the original
expiration date of the Lease Agreement, or the date of the expiration of the Lease designated
in Paragraph 2, whichever occurs later.
4. Option Consideration. As consideration for this Lease, the Lessee shall pay the Lessor a
non-refundable fee of ________ ($___) [Instruction: Insert the consideration amount, e.g.,
Fifty dollars ($50)], receipt of which is hereby acknowledged by the Lessor. This amount
shall be credited to the purchase price at closing if the Lessee timely exercises the Option to
Purchase.
5. Purchase Price. The total purchase price for the Premises is _______ ($______)
[Instruction: Insert the consideration amount, e.g., Fifty thousand dollars ($50,000)].
Provided that the Lessee timely executes the Option to Purchase, is not in default of the
Lease, and closes the conveyance of the Premises, Lessor shall credit towards the purchase
price at closing the sum of _____ ($______) [Instruction: Insert the closing amount, e.g.,
Fifty dollars ($50)] from each monthly lease payment that the Lessee timely made.
However, the Lessee shall receive no credit at closing for any monthly lease payment that the
Lessor received after the due date specified in the Lease.
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6. Remedies upon Default. If the Lessee defaults under this Lease, then in addition to any
other remedies available to the Lessee at law or in equity, the Lessor may terminate this
Option to Purchase by giving written notice of the termination. If terminated, the Lessee shall
lose entitlement to any refund of rent or option consideration. For this Lease to be
enforceable and effective, the Lessor must comply with all terms and conditions of the Lease.
7. Lease Payment. Lessee agrees to pay to the Lessor as rent