An essential distinguishing feature of the rental option is that the contract does not require the tenant to purchase the property, but requires the seller to sell the property if the tenant is exercising the option to purchase correctly. 2. The tenant/buyer`s final lender must not allow the buyer to withdraw a credit from the final account towards the purchase price. As a result, the parties may include in the addendum to the purchase option a provision requiring them to adjust the purchase price to possible credits. It`s perfectly legal and ethical. The parties can renegotiate the sale prices at any time as long as the lender is fully informed. Similarly, buyers should understand that, although option fees and rental premiums are charged to the purchase price, they do not reduce the potential down payment unless the seller agrees to extend these payments if the option to purchase is not exercised. It is of course rare for sellers to do so, because the right to stick to that money is part of what makes rent attractive for their own contract. This type of document allows the seller to retain ownership of the property for the duration of the contract and agrees to transfer the property to the buyer as soon as all payments of the contract have been made and all other obligations are fulfilled.
In essence, the seller finances the purchase and holds the legal right to the property as collateral, while the buyer makes payments. For the duration of the contract, the seller remains responsible for the payment of an underlying mortgage. An option agreement grants the owner of the tenant option the right to purchase the property at an agreed price during the term of the tenancy or any other fixed term, also known as an “option period,” in exchange for a tax paid to the seller, called an “option tax.” “exercise” of an option usually requires termination and payment of the contract price. The option indicates when it should be exercised and, if not exercised within that time, it expires. If the option is not exercised, the amount paid for the option will not be refunded. The Florida Option to Purchase model can be used if a landlord and tenant want to offer both the ability to transfer a property while trying to minimize the participation or amount usually required by financial institutions.