lease-purchase agreement

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 ?
The sale completes a lease-purchase agreement initiated before the current center opened in 2007.
9 August 2018 - Florida, US-based International Rail Partners LLC (IRP) has acquired Mississippi, US-based Grenada Railroad LLC from Iowa Pacific Holdings LLC (IPH), operating the acquisition through a lease-purchase agreement with the North Central Mississippi Regional Railroad Authority (NCMRRA), the company said.
The capital facilities lease appropriation bonds are secured by a lease-purchase agreement between the Department of Natural Resources (DNR), as lessee, and the Ohio Public Facilities Commission, as lessor.
As Shantui's authorised UAE dealer, it is GENAVCO's responsibility to oversee the lease-purchase agreement with NCTC.
Advincula and Sangyahon said their property was covered by a lease-purchase agreement under the Quezon City CMP.
The UO took over the building under a lease-purchase agreement in 1983 and signed a purchase agreement in 1989.
The second type of solar lease is known as a capital lease or a lease-purchase agreement. In this form of lease, the lessee agrees to purchase the solar electric system at the end of the lease at a price negotiated upfront.
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.
The state signed a lease-purchase agreement for the former Dillard's HQ, which will become quarters for the state library, Arkansas Development Finance Authority, Arkansas Science & Technology Authority and the Arkansas Economic Development Commission.
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 agreement contained non-appropriation language, which limited payments to the operating budget savings, thereby avoiding the capital budget process.