Contracts
What is a 'lease with option to purchase' (lease-option) in Illinois?
AA standard lease with a tenant's option to renew for another term
BA lease that gives the tenant the right (but not obligation) to purchase the property at a set price within a specified period✓ Correct
CA purchase contract that allows the buyer to lease the property before closing
DA lease that automatically converts to a purchase after 3 years
Explanation
A lease-option combines a lease agreement with an option to purchase. The tenant pays rent (part of which may be credited toward the purchase price) and has the exclusive right to buy the property at a predetermined price within a specified period. If the tenant doesn't exercise the option, it expires and the landlord keeps any option consideration. Lease-options can help buyers build credit or accumulate a down payment.
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