lease-purchase agreement

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Lease-purchase agreement

An agreement that allows for portions of lease payments to be used to purchase the leased property.

Lease-Purchase Agreement

An agreement between an owner and a renter to rent a property, often but not always real estate, for a certain period of time during which the renter can apply his/her rental payments toward the purchase of property, if he/she desires. For example, suppose one rents a house for $600 per month. In a lease-purchase agreement, the $600 may be held in escrow and may be applied to a down payment on the house at the end of the lease, if the renter so chooses. If the renter does not choose to buy the house, the money in escrow goes to the owner of the property as if it had been rent all along. It is also called a rent-to-own agreement.

lease-purchase agreement

An installment sale.The tenant sometimes pays a higher-than-market rent for the property,with a portion of the monthly payment earmarked as rent,another portion as principal payments,and another portion as interest.

Landlords should not rely on a lease-purchase agreement as a mechanism to keep all payments and bypass foreclosure if there is a default by the tenant.Courts are very antagonistic to such forfeitures. By planning ahead and classifying the different aspects of the monthly payments,you can avoid the possibility of a court deciding things for you or the IRS deciding how to treat the income.

References in periodicals archive ?
Consequently, even if Stanfield is decided in the county's favor, county payments under the lease purchase agreement can be made only if and when the Iowa Supreme Court resolves Riley in the county's favor and then the Bankruptcy Court authorizes the payment.
The most pressing lawsuits, which are currently under appeal before the Iowa Supreme Court, are two which seek to prevent the county from making debt service payments under a lease purchase agreement with the Racing Association of Central Iowa (RACI).
Under a lease purchase agreement between Polk County and RACI, if RACI fails to generate sufficient revenues to make the debt service payment, the county must do so.
The lease purchase agreement gives Arcadia full management control of the property and requires the University to purchase the complex when Chelwyn is ready to sell within the next five years.
The city's debt management is conservative, engaging in the early retirement of both bonded debt and lease purchase agreements.
He will focus on financial analysis, lease purchase agreements, property management and new acquisition evaluation in his new role with the firm.
OTC Bulletin Board: SRCO) in following up on its strategic agreement with Armet Armored Vehicles, a global leader in the manufacturing of tactical armored and other specialty vehicles for governmental and other markets, is pleased to report a potential annual $5 million in Municipal Lease Purchase agreements generated from this relationship.
5% market penetration, this can generate a potential $5 million in annual Lease Purchase agreements for Sparta Commercial Services.
The Corporation is a non-for-profit organized for the sole purpose of acting as the lessor under lease purchase agreements.
Pursuant to separate lease purchase agreements, SportsTown will sell 7 stores in Texas and Oklahoma to Oshman's Sporting Goods, Inc.
The Company will seek buyers for the 9 stores that are not subject to lease purchase agreements, and any such sale will be subject to the approval of the Bankruptcy Court.
Klawetter negotiated contracts, management agreements, lease purchase agreements and asset purchase agreements, which made him familiar with all administrative responsibilities necessary to manage SMR operations.