Lease Option To Buy Agreement Template for Canada

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Key Requirements PROMPT example:

Lease Option To Buy Agreement

"I need a Lease Option to Buy Agreement for a commercial property in Ontario, Canada, with a 24-month lease term starting March 1, 2025, and an option to purchase the property at a pre-set price of $1.2M that can be exercised after 18 months of tenancy."

Document background

The Lease Option To Buy Agreement is a sophisticated legal instrument used in Canadian real estate transactions when a potential buyer wishes to lease a property while securing the right to purchase it in the future. This arrangement is particularly valuable when buyers need time to arrange financing, improve their credit, or evaluate the property through actual occupancy before committing to a purchase. The document must comply with Canadian federal and provincial real estate laws, incorporating elements of both lease and purchase agreements. It typically includes comprehensive terms covering the lease period, option fee, purchase price determination, exercise period, and conditions for both parties. This type of agreement provides flexibility for buyers while giving property owners a committed tenant and potential buyer, often used in both residential and commercial real estate transactions.

Suggested Sections

1. Parties: Identification of all parties involved, including full legal names and addresses of the landlord/seller and tenant/buyer

2. Background: Context of the agreement, including property description and general purpose of the arrangement

3. Definitions: Key terms used throughout the agreement, including 'Option Period', 'Purchase Price', 'Option Fee', etc.

4. Lease Terms: Complete terms of the lease including rent amount, payment schedule, and duration

5. Option Terms: Details of the option to purchase, including option fee, exercise period, and purchase price calculation

6. Property Description: Detailed legal description of the property and any included/excluded items

7. Option Exercise: Process and requirements for exercising the purchase option

8. Purchase Price and Payment: Agreed purchase price or calculation method, and how payments will be handled

9. Tenant/Buyer Obligations: Responsibilities during the lease period and conditions that must be met to exercise the option

10. Landlord/Seller Obligations: Responsibilities regarding property maintenance, insurance, and cooperation with the purchase option

11. Default and Remedies: Consequences of default under either the lease or option terms

12. Assignment and Subletting: Rules regarding transfer of lease or option rights

13. Notices: How and where formal communications between parties should be sent

14. Governing Law: Specification of applicable Canadian provincial law

15. Execution: Signature blocks and execution requirements

Optional Sections

1. Property Maintenance Fund: Used when parties agree to set aside funds for property maintenance during the lease period

2. Rent Credit: Include when a portion of rent payments will be credited toward the purchase price

3. Financing Conditions: Used when specific financing arrangements are part of the agreement

4. Property Inspection: Include when specific inspection requirements or results need to be addressed

5. Insurance Requirements: Used when specific insurance arrangements beyond standard requirements are needed

6. Property Management: Include when specific property management arrangements are required during the lease period

7. Environmental Conditions: Used when environmental issues or requirements need to be addressed

8. Improvements and Alterations: Include when tenant/buyer is permitted to make specific changes to the property

Suggested Schedules

1. Schedule A - Property Description: Detailed legal description of the property and lot details

2. Schedule B - Rent Payment Schedule: Detailed breakdown of rent payments and due dates

3. Schedule C - Option Calculation Formula: Formula for calculating final purchase price including any rent credits

4. Schedule D - Property Condition Report: Detailed description of property condition at lease commencement

5. Schedule E - Permitted Improvements: List of improvements tenant/buyer is permitted to make

6. Appendix 1 - Property Photos: Photographic evidence of property condition

7. Appendix 2 - Required Insurance Certificates: Copies of required insurance documentation

8. Appendix 3 - Property Inspection Report: Third-party property inspection findings

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Real Estate

Property Management

Residential Housing

Commercial Property

Real Estate Investment

Property Development

Legal Services

Financial Services

Insurance

Property Inspection

Relevant Teams

Legal

Real Estate

Property Management

Asset Management

Risk and Compliance

Contract Administration

Investment

Operations

Finance

Business Development

Relevant Roles

Real Estate Agent

Property Manager

Real Estate Lawyer

Real Estate Broker

Legal Counsel

Contract Administrator

Property Development Manager

Asset Manager

Investment Manager

Leasing Manager

Real Estate Investment Advisor

Mortgage Broker

Title Officer

Risk Manager

Compliance Officer

Find the exact document you need

Lease Option To Buy Agreement

A Canadian legal agreement combining a property lease with an option for the tenant to purchase the property under specified terms and conditions.

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Let's create your Lease Option To Buy Agreement

Authors

Alex Denne

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