Contracts
In Maryland, a lease-purchase agreement differs from a lease-option in that:
AThey are legally identical
BA lease-purchase obligates the tenant to buy; a lease-option gives the tenant the right but not the obligation✓ Correct
CA lease-option is not permitted in Maryland
DA lease-purchase does not require a deposit
Explanation
A lease-purchase creates a binding obligation for the tenant to purchase at lease end. A lease-option gives the tenant the choice (option) whether to purchase.
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Key Terms to Know
Purchase Agreement
A legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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