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 ?
Asked to offer ambulance service lease purchase agreement for the period 1.
The certificate sale is essentially a lease and lease back transaction, with the city, through a ground lease, leasing property and improvements to the trustee and, in turn, the trustee and city entering into a lease purchase agreement.
In response to numerous investor inquiries, Atlas Mining Company (OTCBB:ALMI) is pleased to announce the transfer of the lease purchase agreement between Atlas and Conjecture Silver Mines, Inc.
Consistent with past practices, supplements to the master lease purchase agreement between NJT, as lessee, and the Apris Group, as lessor, and supplements to the trust agreement between the Apris Group and the trustee will be executed at the time of closing on the series 2003A COPs in order to facilitate the leaseback of the equipment.
The proceeds of the COPs will be used to advance refund certain certificates of participation in respect of an existing lease purchase agreement, to provide moneys to fund a base rentals reserve requirement and to pay the cost of issuance.
The bonds will be payable from and secured by lease rental payments to be made by the state of North Carolina directly to the trustee, pursuant to a lease purchase agreement.
Bond proceeds will be used to acquire land, buildings, and equipment previously financed by the district under a lease purchase agreement, to construct three elementary schools, and to pay costs of issuance.
Consistent with past practice, supplements to the Master Lease Purchase Agreement between NJT, as Lessee, and the Apris Group, as Lessor, and supplements to the Trust Agreement between the Apris Group and the trustee will be executed at the time of closing on the series 2002 COPs in order to facilitate the leaseback of the equipment.
Atlas Mining Company (Pink Sheets:ALSM) announced today that it has signed a lease purchase agreement to acquire the Dragon Mine in Juab County, Utah.
He will focus on financial analysis, lease purchase agreements, property management and new acquisition evaluation in his new role with the firm.