Question: I am renting a three-bedroom home in Northwest Phoenix. The lease has a one-paragraph option to purchase. The lease will expire shortly, and I have notified the owner of the home that I intend to exercise the option to purchase. What do I need to do to exercise our option to purchase?
Answer: A lease containing a provision providing the tenant with an option to purchase the property should state the specific terms of purchase. The best option to purchase provisions use an executed purchase contract, or at least a rough draft of a purchase contract, as an exhibit to the lease. Therefore, when the option to purchase is exercised, there should not be any extensive negotiations between the tenant and the owner.
In your situation, if you do not have definite purchase terms in the one-paragraph option to purchase, you and the owner will have to negotiate those terms now. If you and the owner cannot agree on those terms now, you will need to consult with a real estate attorney to determine your rights under the one-paragraph option to purchase.
Note: A lease and a purchase contract (with an extended date) can be signed and executed at the same time. In that event, there should be cross-default provisions in both the lease and the purchase contract so that a default under the lease is a default under the purchase contract, and vice versa.