LEASE OPTION Meaning and
Definition
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A lease option refers to a contractual agreement between a property owner, referred to as the lessor, and a potential tenant, known as the lessee, granting the lessee the right to lease the property for a specified period of time while offering them the option to purchase the property at a predetermined price at the end of the lease term. It is essentially a combination of a lease agreement and an option to purchase.
Under the terms of a lease option, the lessee pays an upfront fee, referred to as the option fee, to secure the right to purchase the property. This fee is typically non-refundable and serves as consideration for the option. In addition, the lessee pays monthly rent during the lease period, which may be higher than the market rent, with a portion of the rent potentially being credited towards the purchase price if exercised.
The lease option provides the lessee with the flexibility to live in and test the property before committing to its purchase. This arrangement is often beneficial for individuals who are unable to secure traditional mortgage financing or those who are uncertain about their future plans but wish to secure a potential home.
It is important to note that the terms and conditions of lease options can vary and should be clearly outlined in a legally binding contract, including the option exercise period, purchase price, rent amounts, and any other provisions or restrictions surrounding the agreement.
Common Misspellings for LEASE OPTION
- kease option
- pease option
- oease option
- lwase option
- lsase option
- ldase option
- lrase option
- l4ase option
- l3ase option
- lezse option
- lesse option
- lewse option
- leqse option
- leaae option
- leaze option
- leaxe option
- leade option
- leaee option
- leawe option
- leasw option
Etymology of LEASE OPTION
The etymology of the word "lease option" can be broken down into the origins of both "lease" and "option".
1. Lease:
The word "lease" has Middle English and Old French origins. It can be traced back to the Old French word "les", which means "permission to use or occupy". In turn, "les" comes from the Latin word "laxare", meaning "to loosen" or "to let go". Eventually, the Old French "les" transformed into "lees", and later into "lease" in Middle English. The concept of a lease, as a contractual arrangement for renting or allowing the use of property, has existed for several centuries.
2. Option:
The word "option" has Latin origins. It comes from the Latin verb "optare", meaning "to choose" or "to desire".
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