Home Blog Lease Purchase Explained

Jump to Section

Quick Facts — Lease Purchase Agreement Lawyers

What is a Lease Purchase?

A lease purchase is a formal contract between a renter and a seller that combines the elements of a right of first refusal and a rental contract into one. These agreements are common among the lease-to-own community since they offer the benefits of renting combined with the promise that the tenant will be the first one eligible to put in an offer when the property goes up for sale.

Lease purchase agreements define a certain lease period in which a potential buyer has the right to occupy a property. Lease periods are determined at the time the contract is signed and can serve to give either party time to get their affairs in order, or sometimes even allows the buyer to gain some equity in the property before purchasing it.

How a Lease Purchase Works

Lease purchase agreements are a great tool for buyers and sellers to use to facilitate the sale of a property before it goes on the market. Although the process might seem intimidating, the reality is that it’s easy to understand.

Lease purchase agreements serve to allow tenant-buyers and sellers time to prepare for the sale of a property. They can be utilized by buyers to secure a property while they work on their credit score, save money, or get other affairs in order. Buyers find them helpful to secure the sale of a property to an interested party who might not otherwise qualify due to their inability to qualify for a mortgage note.

Lease purchase agreements consist of two separate real estate contracts : a rental agreement and a contract for sale.

The rental agreement includes provisions such as:

  • Monthly rent and due dates
  • Who is responsible for the maintenance of the property
  • Deposit requirements
  • Pet regulations

The contract for sale, on the other hand, covers the following:

  • Parties involved in the sale
  • Property selling price
  • Down payment requirements
  • Payment methods

Lease purchase agreements also include cross-default provisions which serve to protect both parties to a contract. These provisions entail that if the rental agreement is violated, the contract for sale is, and vice-versa.

Check out this article to learn more about how lease purchase agreements work.

Meet some lawyers on our platform

Jeff G.

21 projects on CC
CC verified
View Profile

Allen L.

253 projects on CC
CC verified
View Profile

Dolan W.

1316 projects on CC
CC verified
View Profile

Faryal A.

424 projects on CC
CC verified
View Profile

How to Structure a Lease Purchase

Whether you’re creating a lease purchase agreement or entering one, it’s important to know how to structure it. Organizing the document properly ensures the enforceability of the real estate purchase agreement and lease purchase agreement.

Here is a breakdown of how to structure a lease purchase agreement:

Step One: Determine Lease Agreement Length

One of the most important aspects of a lease agreement is how long it will last. Whether you need to allow time to lower a debt-to-income ratio or address negative items on a credit report, the amount of time allowed must be clearly defined. Lease agreements should never exceed one year.

Step Two: Consider a Security Deposit

Security deposits help to protect against any damage done to property while a tenant occupies it. Requiring a security deposit ensures that if the lease agreement falls through and repairs are needed beyond normal wear and tear, the costs are covered.

Step Three: Tax and Insurance Responsibility

The seller should maintain the responsibility to pay any insurance and taxes on the property for the duration of the lease purchase agreement. This way, sellers can ensure that all costs associated with the property are paid until the sale takes place. Costs can be recuperated for these items by including an extra cost in the monthly rent to cover them.

Step Four: Include Rent Credit Details

During the time a buyer-tenant resides in the home before purchasing it, sellers can apply a portion of the monthly rent toward equity in the home. It’s important to make sure the lease agreement explicitly states how much of the rent goes toward equity each month.

Step Five: Address Miscellaneous Terms

Any miscellaneous terms of the contract such as home improvement requirements, option price, and fair market value should be included in the lease purchase agreement. This solidifies the contract’s completeness and further protects both parties of the agreement.

Here is an article where you can learn more about how to structure a lease purchase agreement.

What’s the Difference Between a Lease Purchase and a Lease Option?

Even though lease purchases and lease options sound similar, they are not the same thing. Understanding the differences between these agreements will empower you to make the best decision for your future. After all, purchasing a home is one of the biggest commitments you will make in your lifetime.

Here is an overview of lease purchases and lease options and how they are different:

Lease Purchase

A lease purchase entails that at the end of the designated leasing period, the buyer-tenant intends to purchase the rental property. This means that once the first portion of the agreement, the rental agreement, concludes, the buyer-tenant and the seller immediately migrate to the second contract, the purchase agreement. The sale is a sure thing, as long as none of the terms of either agreement is violated.

Lease Option

A lease option is like a lease purchase since it also consists of two contracts. The first contract, the rental agreement, is identical to that of a lease purchase. However, the second is called an option agreement. Option agreements entail that the buyer-tenant has a choice to purchase the property once the rental agreement period concludes after paying an option fee. With a lease option agreement, the buyer-tenant is not obligated to purchase the property; this is the most significant difference between the two.

Get more information about the differences between a lease purchase and a lease option by reading this article.

Lease Purchase Agreements

Lease purchase agreements are handy tools that non-qualified buyers can use to “lock in” property before it goes up for sale to the public. During the period of the rental agreement, buyer-tenants can take time to get personal affairs in order, reduce their debt-to-income ratio, and even obtain equity in the property in which they reside.

Lease purchase agreements are legally binding contracts that obligate buyer-tenants to purchase the property at the end of their rental agreement, which should last no more than one year.

Ultimately, choosing to go into a lease purchase agreement with a seller is a great way to secure your dream property even if you aren’t financially ready to qualify for a mortgage note on it. If you don’t want to wait before securing a new home for you and your family, this path to homeownership is one of the best legally sound ways to do it.

See an example of a lease purchase agreement by viewing this webpage.

Get Help with a Lease Purchase

If you need help with a lease purchase agreement, real estate lawyers can help. Whether you need to draft a new contract, modify an existing one, or want to talk to someone who knows the ins and outs of these contracts, you need a professional on your side.

Post a project on ContractsCounsel today to get in touch with experienced real estate lawyers who specialize in lease purchase agreements and are ready to give you the assistance you need today.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


Need help with a Lease Purchase Agreement?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 21,827 reviews

Meet some of our Lawyers

Joshua B. on ContractsCounsel
View Joshua
5.0 (11)
Member Since:
September 19, 2023

Joshua B.

Founder
Free Consultation
Austin, Texas
24 Yrs Experience
Licensed in NY, TX
University of Texas

Josh Bernstein has been serving real estate and corporate transactional clients since 2002. His experience is varied, and he enjoys working on and puzzling out novel and complex corporate and real estate matters. Josh’s experience includes, among other things, the following: representation of public companies in connection with SEC reporting and compliance work (proxies, 10-K’s; 10-Q’s; 8-K’s, etc.); representation of public and private company securities issuances (including private placements, and other similar offerings); assistance in structuring and drafting joint ventures, both for investors and operating partners, and including both real estate and corporate ventures; handling public and private company mergers and acquisitions; and asset sales and dispositions; assisting clients, big and small, with real estate acquisitions, sales and financings; managing large-scale and multi-state real estate portfolio acquisitions, dispositions and financings; complex condominium creation, structuring and governance work, including: commercial condominiums, use of condominiums as a land planning tool, wholesale condominium property acquisitions and dispositions, and rehabilitating failed or faulty condominium legal structures to make ready for sale; development of restrictive covenants and owners’ association documents for master-planned communities; compliance with federal statutes governing real estate sale and development (including, without limitation, the Interstate Land Sales Full Disclosure Act, the Housing for Older Persons Act, and the Americans with Disabilities Act); representation of real estate lenders, for both improved and unimproved property, and including numerous construction financings secured by real estate; assistance with commercial leasing; from both the landlord and tenant side, and including condominium leasing; training residential home and condominium sales staff for compliance with applicable local and federal law; and workouts of all kinds. When he’s not busy lawyering, Josh may be found watching 80’s commercials, flying a single-engine plane, playing poker, or trying to be a good dad.

Recent  ContractsCounsel Client  Review:
5.0

"Josh has been extremely helpful sorting through issues with a tenant."

Ted A. on ContractsCounsel
View Ted
4.9 (23)
Member Since:
August 10, 2023

Ted A.

Managing Attorney
Free Consultation
New York, New York
27 Yrs Experience
Licensed in NY
Yale Law School

Equity Investments, Agreements & Transactions | Securities & Lending | Corporate Governance | Complex Commercial Contracts | Outside General Counsel & Compliance

Recent  ContractsCounsel Client  Review:
5.0

"Ted was extremely responsive, knowledgeable, easy to work with and was able help me the same day. I would confidently recommend him in the future."

Sara S. on ContractsCounsel
View Sara
4.9 (157)
Member Since:
July 14, 2023

Sara S.

Attorney
Free Consultation
Washington, District of Columbia
6 Yrs Experience
Licensed in DC, MD, PA
American University Washington College of Law

With over eleven years of intellectual property experience, I’m happy to work on your contract problem. I am very diligent and enjoy meeting tight deadlines. Drafting memoranda, business transactional documents, termination notices, demand letters, licenses and letter agreements are all in my wheelhouse! Working in a variety of fields, from construction to pharmaceutical, I enjoy resolving any disputes that come across my desk. I will prioritize your project, big or small. Please be ready and prepared with all relevant documentation so we can get started as soon as you click HIRE! Hourly rate projects will be billed hourly in accordance with the timesheet. Flat rate projects will be billed in segments. Choosing an hourly or flat rate is up to you. Absolutely no refunds.

Recent  ContractsCounsel Client  Review:
5.0

"Sara was responsive and knowledgeable about prenup specifics. Thank you so much!"

Ryan D. on ContractsCounsel
View Ryan
4.8 (23)
Member Since:
April 25, 2023

Ryan D.

Partner
Free Consultation
Charlotte, North Carolina
9 Yrs Experience
Licensed in NC, NJ, SC
Villanova University Charles Widger School of Law

Ryan Duffy is a skilled attorney with extensive experience in business law and estate planning. He received his undergraduate degree in Business from Franklin & Marshall College and went on to graduate from Villanova University Charles Widger School of Law. Ryan has worked with numerous clients on matters ranging from business formation and contract drafting to estate planning and asset protection. He is dedicated to helping businesses of all sizes achieve their goals while minimizing legal risks. He also works closely with individuals and families to help them protect their assets and plan for the future. With his extensive knowledge and practical approach, Ryan can provide valuable legal guidance and support to clients in need of business law and estate planning services.

Recent  ContractsCounsel Client  Review:
5.0

"Ryan was outstanding. His knowledge, contract drafting skills, and ability to grasp key points were all excellent. I strongly recommend him and would absolutely work with him again without reservation."

Ryenne S. on ContractsCounsel
View Ryenne
4.9 (604)
Member Since:
October 11, 2022

Ryenne S.

Principal Attorney
Free Consultation
Chicago, Illinois
16 Yrs Experience
Licensed in IL
DePaul University College of Law

My name is Ryenne Shaw and I help business owners build businesses that operate as assets instead of liabilities, increase in value over time and build wealth. My areas of expertise include corporate formation and business structure, contract law, employment/labor law, business risk and compliance and intellectual property. I also serve as outside general counsel to several businesses across various industries nationally. I spent most of my early legal career assisting C.E.O.s, General Counsel, and in-house legal counsel of both large and smaller corporations in minimizing liability, protecting business assets and maximizing profits. While working with many of these entities, I realized that smaller entities are often underserved. I saw that smaller business owners weren’t receiving the same level of legal support larger corporations relied upon to grow and sustain. I knew this was a major contributor to the ceiling that most small businesses hit before they’ve even scratched the surface of their potential. And I knew at that moment that all of this lack of knowledge and support was creating a huge wealth gap. After over ten years of legal experience, I started my law firm to provide the legal support small to mid-sized business owners and entrepreneurs need to grow and protect their brands, businesses, and assets. I have a passion for helping small to mid-sized businesses and startups grow into wealth-building assets by leveraging the same legal strategies large corporations have used for years to create real wealth. I enjoy connecting with my clients, learning about their visions and identifying ways to protect and maximize the reach, value and impact of their businesses. I am a strong legal writer with extensive litigation experience, including both federal and state (and administratively), which brings another element to every contract I prepare and the overall counsel and value I provide. Some of my recent projects include: - Negotiating & Drafting Commercial Lease Agreements - Drafting Trademark Licensing Agreements - Drafting Ambassador and Influencer Agreements - Drafting Collaboration Agreements - Drafting Service Agreements for service-providers, coaches and consultants - Drafting Master Service Agreements and SOWs - Drafting Terms of Service and Privacy Policies - Preparing policies and procedures for businesses in highly regulated industries - Drafting Employee Handbooks, Standard Operations and Procedures (SOPs) manuals, employment agreements - Creating Employer-employee infrastructure to ensure business compliance with employment and labor laws - Drafting Independent Contractor Agreements and Non-Disclosure/Non-Competition/Non-Solicitation Agreements - Conducting Federal Trademark Searches and filing trademark applications - Preparing Trademark Opinion Letters after conducting appropriate legal research - Drafting Letters of Opinion for Small Business Loans - Drafting and Responding to Cease and Desist Letters I service clients throughout the United States across a broad range of industries.

Recent  ContractsCounsel Client  Review:
5.0

"Ryenne answered all questions and is great to work with! Highly recommend!"

Samuel R. on ContractsCounsel
View Samuel
5.0 (63)
Member Since:
October 2, 2021

Samuel R.

Attorney
Free Consultation
Phoenix - Arizona
7 Yrs Experience
Licensed in AZ, PA, UT
Widener University Delaware Law School

My career interests are to practice Transactional Corporate Law, including Business Start Up, as well as Real Estate Law, Estate Planning Law, and Intellectual Property Law. I am currently licensed in Arizona, Pennsylvania and Utah, after having moved to Phoenix from Philadelphia in September 2019. I currently serve as General Counsel for a bioengineering company. I handle everything from their Business Transactional Agreements, Private Placement Memorandums, and Corporate Structures to Intellectual Property Assignments, to Employment Law and Beach of Contract settlements. Responsibilities include writing and executing agreements, drafting court pleadings, court appearances, mergers and acquisitions, transactional documents, managing expert specialized legal counsel, legal research and anticipating unique legal issues that could impact the Company. Conducted an acquisition of an entire line of intellectual property from a competitor. In regards to other clients, I am primarily focused on transactional law for clients in a variety of industries including, but not limited to, real estate investment, property management, and e-commerce. Work is primarily centered around entity formation and corporate structure, corporate governance agreements, PPMs, opportunity zone tax incentives, and all kinds of business to business agreements. I have also recently gained experience with Estate Planning law, drafting numerous Estate Planning documents for people such as Wills, Powers of Attorney, Healthcare Directives, and Trusts. I was selected to the Super Lawyers Southwest Rising Stars list for 2024 - 2026. Each year no more than 2.5% of the attorneys in Arizona and New Mexico are selected to the Rising Stars. I am looking to further gain legal experience in these fields of law as well as expand my legal experience assisting business start ups, and also trademark registration and licensing.

Recent  ContractsCounsel Client  Review:
5.0

"Thanks Samuel for your thorough review of my materials. I'm incredibly impressed by your prompt turnaround in drafting my letter. The letter captured the facts perfectly and struck exactly the right tone."

Clara D. on ContractsCounsel
View Clara
Member Since:
October 8, 2021

Clara D.

Principal
Illinois
23 Yrs Experience
Licensed in IL
University of Chicago

Clara Duffield is a seasoned financial services, technology, privacy, business, intellectual property, and real estate lawyer, with in-house and large firm experience. She currently represents a range of clients, from start-ups to large, heavily-regulated companies, in a wide variety of transactional matters. After graduating from The University of Chicago Law School, Clara spent eight years in private practice representing clients in complex commercial real estate, merger and acquisition, branding, and other transactional matters. Clara then worked as in-house counsel to a large financial services company, handling intellectual property, vendor contracts, technology, privacy, cybersecurity, licensing, marketing, and otherwise supporting general operations. She opened her own practice in September of 2017. Duffield Law provides strategic and flexible representation to businesses of all sizes. Its clients include entrepreneurs and early-stage startups to Fortune 100 companies. From outside general counsel or volume work to discreet assignments, our small firm model allows us the flexibility to provide only the legal services a client needs, without sacrificing the quality all clients deserve. With a depth of in-house and large law firm experience, we work with clients to thoughtfully assess risk, identify and engage subject matter experts, and manage legal spend.

Find the best lawyer for your project

Browse Lawyers Now

See Real Lease Purchase Agreement Projects

Texas Rent to Own Contract Mobile Home Park Review
  • Texas
  • 5 lawyer bids
  • $225 - $550
View Details
California Restaurant lease Drafting
  • California
  • 3 lawyer bids
  • $395 - $2,450
View Details
Texas Lease Agreement Drafting
  • Texas
  • 4 lawyer bids
  • $499 - $950
View Details
North Carolina Lease Option draft and record Drafting
  • North Carolina
  • 4 lawyer bids
  • $700 - $3,500
View Details
North Carolina Unusual terms arrangement for leasing our townhome Drafting
  • North Carolina
  • 4 lawyer bids
  • $499 - $850
View Details
Texas Create Lease Purchase Agreement Drafting
  • Texas
  • 10 lawyer bids
  • $499 - $2,500
View Details

See all Lease Purchase Agreement projects

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Need help with a Lease Purchase Agreement?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 21,827 reviews
CONTRACT LAWYERS BY TOP CITIES
See All Real Estate Lawyers
LEASE PURCHASE LAWYERS BY CITY
See All Lease Purchase Lawyers

Contracts Counsel was incredibly helpful and easy to use. I submitted a project for a lawyer's help within a day I had received over 6 proposals from qualified lawyers. I submitted a bid that works best for my business and we went forward with the project.

View Trustpilot Review

I never knew how difficult it was to obtain representation or a lawyer, and ContractsCounsel was EXACTLY the type of service I was hoping for when I was in a pinch. Working with their service was efficient, effective and made me feel in control. Thank you so much and should I ever need attorney services down the road, I'll certainly be a repeat customer.

View Trustpilot Review

I got 5 bids within 24h of posting my project. I choose the person who provided the most detailed and relevant intro letter, highlighting their experience relevant to my project. I am very satisfied with the outcome and quality of the two agreements that were produced, they actually far exceed my expectations.

View Trustpilot Review

Need help with a Lease Purchase Agreement?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 21,827 reviews

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city