Lease Option Agreement Template

Does anyone know where I can find a template for a Lease Option Agreement. I want to use that path to get started in investing. Is there a standard form or do I have to create my own?

There is a standard form, but each state will have it’s own laws and you need to get a local form and then you can replicate it over and over.

What I would do is go to my local real estate investor’s club and find people that are doing lease options. Ask them what they use.

You can try over at The Naked Investor for some forms. As for creating one on your own, unless you are a real estate attorney, that sounds to me like an invitation to a lawsuit.

There are a few points about the standardized agreement that I posted.

  1. This kind of contract should be notarized.

  2. I don’t like item 5, and if I were to use this particular document, I would delete it.

  3. I want a specific line item which allows me to sublet and/or assign the lease option, so that I could put a renter into the property, or turn around and offer the option to buy to another party, or do a double close at some point during my option period.

Bill Bronchick has several articles, look at the left side of your computer screen, go under investor information then click on “real estate articles,” look under the author Bill Bronchick and review his articles on Lease options. You may want to record your option, you may want to put a bug in the ear of the seller about the possibility of buying the property subject to existing financing.

Here again, please get a real estate attorney, and try to find a local investor to at least review your ideas.

How you handle this will depend upon your exit strategy and your local laws. Please be sure to know what you are doing when you get into something like this.

By the way, what type of lease option are you talking about? There are many different types in the lease option strategy, and the agreement you use will be very different depending upon your position in the deal.

Thanks, folks, great information. Big thanks for the sample and tips, IRO.

Great post IRO! I read a few of Bill Bronchick’s articles and on one of them he actually recommends that the option is recorded so that there is public record of the T/B’s interest. Can Paragraph 11 be removed without ruining the integrity of the contract? Also, do you know if recording a option (or escrowing the deed or recording a mortgage which he also recommends) will trigger the acceleration clause for the L/S? Thanks for any help :biggrin

Neither a lease agreement, nor an option to purchase agreement needs to be notarized. They can be, but in no way does it affect the legality or enforceability of the agreement.
The generic contract above is just that, generic. Depending upon the type of lease purchase deal you are involved in, it may be all wrong for your position in the deal.
As for recording a memo of option, not necessary unless you are remaining in the deal long term. If you’re assigning the deal such as in a CA, there’s no point. However, if you do record a memo, yes, it can trigger the DOS clause. However, you have a better chance of winning the lottery, being bit by an alligator, being struck by lightning, and being mistaken for Justin Beiber all in the same day.