lease-purchase agreement

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 ?
Tenders are invited for Lease-purchase agreement or for the outright purchase.
As Shantui's authorised UAE dealer, it is GENAVCO's responsibility to oversee the lease-purchase agreement with NCTC.
The real property can be Leased or purchased with the business or under a Lease-purchase Agreement.
But instead of pocketing those savings, the district uses them to make installment payments on the lease-purchase agreement, which in Warren County's case has a 15-year term.
Instead of bundling the financing under the performance contract, the district chose to obtain financing directly from a commercial lender using a 10-year tax-exempt lease-purchase agreement.
The papers include a copy of the lease-purchase agreement, payment schedules, legal opinions, and papers naming the investor as the owner or assignee of the contract.
The Lease-purchase Agreement Shall Contain A Standard Government Non-appropriation Provision.
Once the master lease-purchase agreement has been negotiated, the lessee has the ability to expeditiously access additional financings through takedowns under the master lease agreement by simply executing a set of schedules and exhibits to the master lease agr eement.