Option To Purchase In Lease Agreement Template for Malaysia

The Option To Purchase In Lease Agreement is a specialized legal instrument used in Malaysian property transactions where parties wish to combine a lease arrangement with a future purchase opportunity. This document is particularly valuable in situations where a potential buyer wishes to occupy and evaluate a property before committing to a purchase, or when financing arrangements require a delayed purchase. It provides protection for both landlord and tenant under Malaysian law, incorporating provisions from the National Land Code 1965, Contracts Act 1950, and relevant property legislation. The agreement typically includes detailed terms for the lease period, specific conditions for exercising the purchase option, price determination mechanisms, and the rights and obligations of both parties during both the lease phase and potential purchase phase. This type of agreement is commonly used in both commercial and residential property transactions and requires careful consideration of Malaysian property registration requirements and stamp duty obligations.

1. Parties: Identification of the lessor/seller and lessee/potential purchaser with full legal names and details

2. Background: Context of the agreement, including property details and parties' intention to enter into lease with option to purchase

3. Definitions: Key terms used throughout the agreement including Property, Option Period, Purchase Price, Exercise Notice

4. Lease Terms: Core lease provisions including rent, duration, maintenance responsibilities, and other standard lease terms

5. Option Grant: Explicit grant of the option to purchase, including the option fee and whether it's refundable or forms part of the purchase price

6. Option Exercise Period: Timeframe and conditions under which the option can be exercised

7. Purchase Price and Payment Terms: Agreed purchase price, payment structure, and any adjustments or calculations

8. Exercise Procedure: Step-by-step process for exercising the option, including notice requirements and documentation

9. Completion of Purchase: Requirements and procedures for completing the property purchase once option is exercised

10. Property Condition: State of the property, warranties, and condition requirements at both lease and potential purchase stages

11. Default and Remedies: Consequences of default under either lease or option terms, and available remedies

12. Termination: Circumstances under which the agreement can be terminated and consequences

13. Governing Law and Jurisdiction: Specification of Malaysian law as governing law and jurisdiction for disputes

14. Notices: Process and requirements for serving notices under the agreement

15. General Provisions: Standard boilerplate clauses including entire agreement, amendments, severability