Lease Agreement With Option To Purchase Template for Germany

A Lease Agreement With Option to Purchase is a sophisticated legal instrument used when parties wish to combine immediate property usage rights with a future purchase opportunity. This document is particularly relevant in the German market where businesses or individuals seek flexibility in property acquisition or want to test a property's suitability before committing to purchase. It must comply with German legal requirements, including the German Civil Code (BGB), property law, and notarization requirements. The agreement typically includes detailed provisions for both the lease period (rent, maintenance, utilities) and the purchase option (price, exercise period, conditions). It's commonly used in commercial real estate transactions but can also apply to residential properties, offering protection for both parties while providing a clear path to property ownership.

1. Parties: Identification and details of the lessor/potential seller and lessee/potential buyer

2. Background: Context of the agreement and brief description of the property and transaction structure

3. Definitions: Definitions of key terms used throughout the agreement

4. Property Description: Detailed description of the leased property including address, land register details, and included fixtures/fittings

5. Lease Terms: Core lease provisions including duration, rent amount, payment terms, and deposit requirements

6. Use of Property: Permitted uses of the property and any restrictions

7. Maintenance and Repairs: Responsibilities for property maintenance, repairs, and improvements

8. Insurance and Liability: Required insurance coverage and allocation of liability

9. Option to Purchase: Terms of the purchase option including price, exercise period, and exercise mechanism

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

11. Purchase Price and Payment: Purchase price determination, payment terms, and treatment of lease payments

12. Handover and Transfer: Process for property handover upon exercise of purchase option

13. Warranties and Representations: Warranties regarding property condition and ownership

14. Termination: Grounds and process for termination of the lease and/or purchase option

15. Notices: Process and requirements for formal communications between parties

16. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction