NO, No such thing. You are ALREADY mixing apples and oranges. The Lease Contract to OCCUPY the property is ALWAYS a separate regular lease. The Option to Purchase the property is an agreement between you and the tenant where you give the tenant a exclusive right to purchase the property, for a set period (2 years?), and for a fixed price, during which time they are to pay rent on time, esatablish a good payment history(which you will later verify to the bank), save for a downpayment (which you may chose to give a sum of money toward at the closing), and they are to obtain outside funding by the end of the Option period.
This way they don't purchase the PROPERTY till they go to the closing table with funds to PAY YOU. All they are initially purchasing is the exclusive option, and TIME! The amount they pay you is the cost of the option, $1000-3000(or whatever) is a non-refundable "OPTION FEE" which is NEVER called a deposit or a downpayment! That fee pays you for keeping the property off the market, and for having to turn away offers from other parties.
Some Purchase Options give the tenant a $50/mo credit at CLOSING for every month they paid the rent on time on the Lease(e.g. if they pay on time every month of a 2 year Option, you come to the closing table with $1200 for them to put toward their downpayment to the bank.
If you do this wrong--the tenants will have equitable interest in your property, or if they decid4e they do not want to buy the house they will expect THEIR "deposit" returned and sue. It has to be done right to work--and by that I mean to protect you, the property owner.
--140.140.xx.x
purchase option (by regina oslapas [OR]) Nov 18, 2008 8:05 AM
purchase option (by Lynda [TX]) Nov 18, 2008 10:41 AM