What is a key feature of a lease purchase agreement?

A lease purchase agreement includes a key feature where the tenant has the option to purchase the property at a later date. This arrangement allows tenants to lease the property with the understanding that they can buy it within a specified timeframe and often at a predetermined price. This structure benefits both parties: the tenant gets a chance to accumulate the necessary funds or improve their credit score while living in the property, and the landlord has a prospective buyer lined up even while the tenant is leasing.

In this context, other options do not accurately represent the typical nature of a lease purchase agreement. For instance, the tenant is not obligated to buy the property immediately; they have the choice to do so later. Additionally, there isn’t a strict limitation restricting the lease period to just one year; the terms can vary based on the agreement made between the tenant and landlord. Lastly, a lease purchase agreement typically cannot be terminated by the landlord at will, as both parties usually need to adhere to the terms established in the contract.