Florida Lease to Own Contract: A Comprehensive Guide

A lease to own contract, also known as a rent-to-own agreement, is a legal agreement between a landlord and tenant that gives the tenant the option to purchase the property they are renting. This type of agreement is popular among first-time homebuyers who may not have the financial resources to purchase a property outright. In Florida, the lease to own contract is a great option for those looking to buy a home but lack the funds to do so.

In this article, we’ll discuss what a Florida lease to own contract is, how it works, and what you need to know before entering into an agreement.

What is a Florida Lease to Own Contract?

A Florida lease to own contract is a legal agreement that allows a tenant to rent a property with the option to buy it at a later date. In this type of agreement, the tenant pays the landlord a monthly rent, a percentage of which is applied to the purchase price of the property. The tenant has a set amount of time, typically 12 to 24 months, to exercise their option to buy the property.

How Does a Florida Lease to Own Contract Work?

When entering into a lease to own contract, both the landlord and tenant must agree to the terms of the agreement. These terms typically include the purchase price of the property, the monthly rent payment, the length of the contract, and the option fee.

The option fee is a non-refundable fee that the tenant pays to the landlord to secure the option to buy the property. This fee is typically 3% to 5% of the purchase price of the property and is credited towards the purchase price if the tenant decides to buy the property.

During the term of the lease, the tenant pays a monthly rent payment, a portion of which is applied to the purchase price of the property. If the tenant decides to buy the property, the purchase price is reduced by the amount of rent paid during the term of the lease.

What Do You Need to Know Before Entering into a Florida Lease to Own Contract?

Before entering into a lease to own contract in Florida, it’s important to carefully review and understand the terms of the agreement. Here are some key factors to consider:

1. Purchase Price: Make sure the purchase price of the property is fair and reflects the current market value of the property. You may want to consider having an appraisal done to determine the value of the property.

2. Monthly Rent Payment: Ensure the monthly rent payment is affordable and within your budget.

3. Length of Contract: Consider how long the lease to own contract is and ensure it gives you enough time to secure financing and purchase the property.

4. Option Fee: Understand the option fee and whether it is refundable or non-refundable.

5. Maintenance and Repairs: Determine who is responsible for maintenance and repairs during the term of the lease.

In conclusion, a Florida lease to own contract can be a great option for those looking to buy a home but lack the funds to do so. However, it’s important to carefully review and understand the terms of the agreement before entering into a lease to own contract. With proper due diligence and understanding of the agreement, a lease to own contract can be a great way to achieve the dream of home ownership.