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.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
State law establishes clear processes that would allow for timely payment of principal and interest, if a school district does not make a scheduled debt service payment on GO bonds and certain electoral authorized lease purchase agreements issued after July 1991.
2, b) or purchase money mortgages, lease purchase agreements or similar securities (Section 204, par.
Using one of the Marina West chairman's figures quoted to a CEO of a major Bahrain company in January 2011, there appears to be a way of completing this project in stages for under BD20m and in doing so ultimately provide over 370 low-cost apartments for under BD57,000 via long-term lease purchase agreements solely for Bahrain nationals.
He will focus on financial analysis, lease purchase agreements, property management and new acquisition evaluation in his new role with the firm.
School Obligations Summit Bank's Lease Purchase Agreements with School Districts for Global Business Solutions' Equipment School Original Balance as of Districts Balance Oct.
Sainsbury's says that the scheme will work rather like existing hire purchase or lease purchase agreements, with the customer putting down a deposit and making monthly payments over two or three years.
It is not typical in the container leasing business for the equipment to be leased under lease purchase agreements or full-payout leases under which the customer agrees to pay sufficient rent for the lessor to recover the entire cost of the equipment.
Practically, this would be most relevant to Fitch-rated projects with similar lease purchase agreements such as the Mid-Bay Bridge Authority (senior/junior liens rated BBB+/BBB/Stable).
The lease purchase agreement (LPA) between FDOT and the authority along with the bond resolution had structurally subordinated reimbursements of these costs to payments to senior bondholders, prior to and following any payment default.
To accommodate these special circumstances, every lease purchase agreement has a "fiscal funding" clause that lets the government walk away from its obligations if funds are not appropriated for the contract each year.