What is the difference between a lease option and a lease purchase?

What is the difference between a lease option and a lease purchase?

• A. Lease purchase allows negotiations on price
• B. Lease option requires tenant purchase at lease end
• C. Lease option gives tenant the right to purchase
• D. Lease purchase can be canceled at any time

Answer: (C)

A lease option gives the tenant the right, but not the obligation, to purchase the property at a predetermined price within a specified period. This arrangement allows the tenant to live in the property while having the opportunity to buy it later, usually after a set lease term. The tenant can choose whether or not to exercise this option, making it a flexible choice for those who may wish to test the property or their financial situation before committing to a purchase. In contrast, a lease purchase agreement typically obligates the tenant to purchase the property at the end of the lease term, which may limit the tenant's choice compared to a lease option. This fundamental difference underscores why the lease option is viewed as a more flexible agreement, as it provides rights without obligations, allowing potential buyers to make a more informed decision.

A lease option gives the tenant the right, but not the obligation, to purchase the property at a predetermined price within a specified period. This arrangement allows the tenant to live in the property while having the opportunity to buy it later, usually after a set lease term. The tenant can choose whether or not to exercise this option, making it a flexible choice for those who may wish to test the property or their financial situation before committing to a purchase.

In contrast, a lease purchase agreement typically obligates the tenant to purchase the property at the end of the lease term, which may limit the tenant's choice compared to a lease option. This fundamental difference underscores why the lease option is viewed as a more flexible agreement, as it provides rights without obligations, allowing potential buyers to make a more informed decision.