3. At the end of the agreement, you will have to make the third type of payment: the last installment, often called balloon payment. This is usually several thousand pounds and must be paid – you can`t just return the car. However, it is usually possible to renew the lease with additional monthly payments or refinance the vehicle to cover the payment of the balloon if you are unable or unable to pay the lump sum. A leasing option works very similarly to a lease purchase because it consists of two contracts and theoretically allows the tenant to acquire the property in the end. However, the tenant does not sign a sales contract, but an option contract (“option contract”). The purpose of the lease agreement is to determine who is responsible for the maintenance and repair of the home and who will pay the costs and services of the owners. You need tenant insurance and the landlord is responsible for purchasing the owner`s insurance. In a standard lease-sale agreement, both parties agree on a rental period during which the rent is paid and conditions of sale at the end of the rental period, including the sale price. Often, the contract is divided into two parts, one being the duration of the credit and the other a sales contract.
The rental agreement explains what responsibility the tenant/buyer and lessor/seller assumes during the lease. This contract also includes the option fee and how much the monthly payment is credited on the down payment for the purchase of the house at the end of the lease. A rental option is a contract in which a landlord and tenant agree that the tenant can purchase the property at the end of a given period. The tenant pays a pre-option fee and an additional amount per month that goes towards the eventual down payment. If you decide not to buy the house at the end of the contract, you will lose your option fees as well as any money you spend on a down payment, but a seller cannot come after you because you decide not to follow the purchase. Buyers sign up for a forced savings plan when a portion of the rental payment is charged to the purchase price at the end of the lease option agreement. If the buyer is late, the seller does not repay part of the payment of the rental or option and may reserve the right to take legal action for a defined benefit. Once you have found that an option-to-purchase lease is useful for you, ask a real estate lawyer to consult documents that may contain a separate lease and sales contract. Let your lawyer guide you through the agreement and ask for clarification on anything you don`t understand before signing on the points line.
The money in the option is not refundable. No one else can purchase the property unless the buyer is late and the buyer generally cannot give up the lease without the seller`s consent. Buyers are often responsible for the maintenance of the property and the payment of all expenses related to its maintenance over the life, including taxes and insurance, and are contractually required to purchase the property. It is usually possible to refinance the car to cover the payment, but there is no cast iron guarantee that this will bring the necessary money. You can also renew the lease and, for example. B, make monthly payments for an additional year. Sometimes sellers give the option of money to their real estate agent as the full payment of the commission. Brokers are not always involved in exercising leasing options or executing leasing contracts, and you will probably still need a real estate lawyer, even if you have retained the representation of the real estate agent. Agents are not lawyers, and they cannot give you legal advice.