When a property owner and an individual who has the option of purchasing the property at the end of the lease period, comes to an ordinary lease agreement, this agreement is called a Lease Purchase Agreement. This system was regularly used for the acquisition of property some time ago but was either forgotten or ignored during the real estate boom. However, due to the recent slump in the housing market, this option has been revitalized and is fast becoming more popular in real estate circles.
This agreement has to be in written form, and the document has to be agreed upon by both parties. Like all legal documents, there is a protocol involved. Therefore, a contract has to be drawn up and signed by both the property owner and the person (from here on refers to as the lessee) who wishes to use the property. This contract is what now becomes the Lease Purchase Agreement. The services of a lawyer are usually retained by both the property owner and the lessee to word the document and oversee and explain the legal angles.
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The location, size, and boundaries of the property should be explicitly stated. The size of the property and its location affects the cost. The limits are necessary for that property do not have definitive shapes and therefore may not be suitable for the lessee intended use. Of utmost importance, make sure the property is free of financial liabilities (that there is no lien on the property). No agreement should be entered into without first agreeing on the final sum of money to be paid and the time frame in which it is to be