Leasing options also come with risks and disadvantages. The tenant must pay something to the landlord in exchange for the right of sale (the option). This compensation usually takes the form of an increased rent for the duration or a lump sum payment at the beginning of the lease. If the tenant decides not to exercise the option, the payment is cancelled. Learn more about how the Rent-to-Own process works. The tenant`s purchase option has a price. The tenant must pay the landlord the „option indemnity“ or some kind of counter-option or premium. This consideration can be a set amount paid in advance – usually between 2.5% – or can be part of the monthly rents. While the royalty or premium is non-refundable, it can normally be applied as a purchase price credit when the option is exercised. Leasing option contracts are also ripe for serious unforeseen disputes. Below are three common disputes that give rise to disputes: the parties may also have to decide directly whether they wish to rent the property or sell the property, and cannot enjoy the benefits of a rent-to-own contract. In Pennsylvania, a question that comes up to me often on my desk concerns Rent-to-Own scenarios.

This comes to me from both directions, either you are a homeowner in Pennsylvania, and you have a tenant who wants to buy your property, but does not have the means or credit to do so directly, or I also receive tenants who come to my office to ask them to make this offer to their landlord. First of all, whether you are the homeowner or the potential home buyer, don`t just sign what`s given to you. This is strong legal advice on a broad front.