Lease option agreements, also known as rent to buy contracts, allows a property owner to confer on a tenant both the right to occupy the property under a lease and the right to purchase the property under an option.
Many commercial properties are rented on this basis, giving the tenant an option to purchase the property in specified circumstances. In more recent times, lease option agreements have also been used in relation to residential properties. Unfortunately the results have been mixed, with some property owners or investment promoters creating poorly conceived transactions that disadvantage the tenants, resulting in authorities such as Consumer Affairs to take a dim view of such transactions. This, coupled with unfavourable stamp duty treatment, has seen a sharp decline in the use of lease options in Victoria.
At Lewis O’Brien & Associates, we know that there remains room for well-conceived lease option agreements – even if the scope has been narrowed by recent changes – you just need us to handle it for you.
Please get in contact with us for more information.