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Residential Lease With Option To Buy Template for Canada

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Key Requirements PROMPT example:

Residential Lease With Option To Buy

"I need a Residential Lease With Option To Buy agreement for my Vancouver property, starting March 1, 2025, with a two-year lease term and an option to purchase at a fixed price of $850,000, where 25% of the monthly rent payments will be credited toward the purchase price if the option is exercised."

Document background
The Residential Lease With Option To Buy agreement is a specialized legal document used in Canadian real estate transactions where a property owner wishes to lease their property while giving the tenant the exclusive right to purchase it during or at the end of the lease term. This arrangement is particularly suitable for potential buyers who need time to arrange financing, improve their credit, or save for a down payment, while securing their right to purchase at a predetermined price. The document must comply with provincial residential tenancy laws and real estate regulations, typically including detailed terms for both the lease period (rent, maintenance, utilities) and the purchase option (option price, exercise period, rent credits). It's commonly used in situations where both parties want to work toward a property sale but need a structured transition period, providing security for the tenant/buyer while allowing the landlord/seller to earn rental income until the sale is completed.
Suggested Sections

1. Parties: Identification of landlord/seller and tenant/potential buyer, including full legal names and addresses

2. Background: Context of the agreement, including property description and intent to combine lease with purchase option

3. Definitions: Key terms used throughout the agreement, including property-specific terms, financial terms, and option-related terminology

4. Lease Terms: Standard residential lease provisions including rent, term, utilities, maintenance, and tenant obligations

5. Property Use and Maintenance: Specific rules regarding property use, maintenance responsibilities, and any restrictions

6. Option to Purchase: Terms of the purchase option, including option price, duration, and exercise process

7. Option Price and Credit: Purchase price, any rent credit towards purchase, and payment terms

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

9. Title and Property Condition: Guarantees regarding property title and condition upon sale

10. Default and Remedies: Consequences of default under either lease or option terms

11. Insurance and Risk: Required insurance coverage during lease and transition to purchase

12. Assignment and Subletting: Restrictions on transferring lease or option rights

13. Notices: How formal communications between parties must be made

14. Governing Law: Applicable Canadian provincial law and jurisdiction

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

Optional Sections

1. Property Improvements: Terms regarding tenant improvements and how they affect purchase price - include when improvements are anticipated

2. First Right of Refusal: Alternative to straight option, giving tenant first right to purchase - use when preferred over direct option

3. Property Management: Terms for property management during lease - include for properties with common areas or complex maintenance needs

4. Financing Contingencies: Conditions related to tenant's ability to secure financing - include when buyer may need specific financing arrangements

5. Option Extension Terms: Conditions for extending the option period - include when flexibility in option timeline may be needed

6. Early Purchase Terms: Conditions for exercising option before end of lease - include when early purchase might be desired

7. Rent Escalation: Terms for rent increases during lease period - include for longer lease terms

Suggested Schedules

1. Schedule A - Property Description: Detailed legal description of property and included fixtures/chattels

2. Schedule B - Rent Payment Schedule: Detailed rent payment terms and schedule, including how payments apply to purchase

3. Schedule C - Property Condition Report: Detailed assessment of property condition at lease start

4. Schedule D - Option Calculation Formula: Detailed explanation of how purchase price and rent credits are calculated

5. Schedule E - Property Rules and Regulations: Detailed rules for property use and maintenance

6. Appendix 1 - Required Insurance Coverage: Specific insurance requirements for both parties

7. Appendix 2 - Property Maintenance Checklist: Detailed maintenance responsibilities and schedules

8. Appendix 3 - Option Exercise Forms: Forms and procedures for exercising purchase option

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions

















































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Relevant Industries

Real Estate

Property Management

Residential Housing

Legal Services

Financial Services

Insurance

Property Development

Property Investment

Relevant Teams

Legal

Real Estate

Property Management

Sales

Contracts Administration

Investment

Risk Management

Compliance

Housing Operations

Client Services

Relevant Roles

Real Estate Lawyer

Property Manager

Real Estate Agent

Real Estate Broker

Leasing Manager

Property Developer

Investment Manager

Legal Counsel

Contract Administrator

Housing Coordinator

Mortgage Broker

Property Investment Advisor

Real Estate Investment Manager

Residential Sales Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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