Massachusetts Law Re: Lease Options, Owner Financing, & Sub To

I just took the state licensing course for real estate license - some of the questions i asked were pertaining to L/O, Sub To, & Owner Financing & Nominee ( Land ) Trusts & also work for equity under lease option…it was said to me that doing any of these things is illegal in Mass state and we had an in class debate.

  • however I think there should still be a way to do this… I have to be careful what I do once I get my license and disclose everything i know - but how can I implement these investment strategies here in Mass state… and what can I do to protect myself fully beside disclosure…

Please be detailed and cover all my questions and concerns on how to do this in my state… Thanks in advance!!

Contact your local real estate attorney in the area.

Unless Massachusetts has ceded from the Union, lease options are definitely legal in the state. Anyone arguing otherwise is misguided, to say the least.

Those transactions are legal. The real issue is that your lease option will need to comply with MGL 93 and MGL 186, which will eviscerate the benefits to you in favor of the buyer.


 In all actuality in some states doing a lease with an option is illegal! Some states require that a written lease is signed seperately from an agreement to option a property!

This helps protect parties to a option from not losing there option consideration monies even if for some reason a party needs to break or terminate the lease.

They are treated as completely seperate legal transactions!


I’m from mass I truly hope that Lease Option are not illegal in this state, for a starter like myself it will put a blow to my real estate business,

I’m not familiar with any state that makes it illegal to buy a house that you’re renting, although states are beginning to draft statutes specific to lease options, as the property codes hadn’t addressed them before.
I’m in TX, and we have statutes regarding LO’s, as does NC, and I know others will follow suit.
I haven’t reviewed Mass. law, so I can’t speak specifically about their requirements or disclosures etc.