What Are Common Client Concerns in Lease to Own Agreements?
When reviewing lease to own agreements, we’ve found that property owners and buyers tend to share similar queries. Since these agreements can be complex, with terms pertaining to rights and financial commitments, hiring a lawyer for legal review is recommended.
ContractsCounsel, an online legal marketplace that connects clients to vetted lawyers for contract drafting and review, has conducted research to identify the top concerns clients have about lease to own agreements. These include option to purchase, repair and maintenance, early termination consequences, legal enforceability, contingencies, and language accuracy.
Note: ContractsCounsel’s data comes from real, anonymized lease to own agreement review postings on the platform.
Option to Purchase Clause Clarity and Enforceability
Concern 1: Clients want the agreement to clearly specify the option to purchase. It should be written in language both parties can understand and be legally enforceable.
How lawyers help: A real estate lawyer can review the agreement to check timing, conditions, pricing, and legal compliance.
Repair and Maintenance Responsibilities
Concern 2: It’s a common concern for tenants to worry about who bears responsibility for property repairs and maintenance. They don’t want to be held accountable for tasks that should be the owner’s responsibility.
How lawyers help: Real estate lawyers will check all maintenance clauses. This should clearly define who is responsible for repairs, maintenance, and insurance.
Consequences of Default or Early Termination
Concern 3: Our research has found that clients usually ask what happens if payments are late or missed. These and other surprise events could potentially disrupt the sale.
How lawyers help: A lawyer will scrutinize the agreement to check that all rights and clauses are reasonable, clear, and fair. It should include a note about penalties, defaults, and refunds.
Legal Enforceability and Potential Pitfalls
Concern 4: Since contract enforceability varies by state, it’s common for clients to want to know that everything is legal and complies with regulations.
How lawyers help: Attorneys are knowledgeable about jurisdictional laws, so they can check and confirm that the contract is legally sound.
Contingencies for Owner’s Death or Emergencies
Concern 5: Should the owner of the property die or experience an emergency that hampers their ability to complete the sale, there should be clauses outlining the steps the tenant should follow.
How lawyers help: A lawyer will add contingency terms to the contract. These protect the tenant against any unforeseen situations, and explains how transfer obligations can still proceed.
Tenant’s Obligation or Option to Purchase
Concern 6: Some clients want clarification about whether the agreement gives them the option to purchase or makes them obligated to do so.
How lawyers help: An attorney will check the contract for any confusing language and reflect the tenant’s rights. Any hidden or unclear obligations will be removed.
Accuracy and Consistency of Contract Language
Concern 7: Clients request a legal review to check for any mistakes, however small, that can make the contract invalid.
How lawyers help: During their contract review, real estate lawyers will correct any inaccurate information, spelling errors, and make the document legal before the parties sign.
Key Takeaways
- We’ve found the top client concerns include purchase options, accuracy, and repairs.
- Tenants and owners want contingency and enforceability clauses to safeguard their interests.
- Legal review keeps the agreement legally binding, fair, and accurate.
Need help with your lease to own agreement?
If you seek legal assistance with reviewing your lease to own agreement, post your project for free on ContractsCounsel. You’ll connect with experienced, vetted real estate lawyers who will help you check the agreement so that it’s legal and protects everyone’s interests.
