renting with option to purhcase included in lease agreement

DandelionPatrol

mrginge wrote: »

Well i beg to differ that you beg to differ.

Just because the price is written in the contract, does not mean the OP can't attempt to renegotiate it. The landlord is free to decline, accept or negotiate further. Just like they would be with anyone else who didn't have the option price.

The potential benefit for the OP is if the offer price is below the market rate at the point of purchase and they are then on the end of a bargain.

You are not really differing with me here. It is an option to buy, not an option to sell. SO OP could negotiate down but there would be no point in LL negotiating up, because the option price could be made to stick.

His_Dudeness

G_M wrote: »

Would the buyer's mortgage lender permit the purchase to Complete with a 'sitting tenant'?

:rotfl:

Well, you know how solicitors advise to inspect the property to make sure the tenant has left.
OP could walk around the house one morning just to confirm that there is no-one but him.

mrginge

G_M wrote: »

Would the buyer's mortgage lender permit the purchase to Complete with a 'sitting tenant'?

:rotfl:

I hope you are aware there are two meanings of 'sitting tenant'.

Sometimes your arrogance is just too much to bear.

mrginge

DandelionPatrol wrote: »

You are not really differing with me here. It is an option to buy, not an option to sell. SO OP could negotiate down but there would be no point in LL negotiating up, because the option price could be made to stick.

Fair point.

G_M

mrginge wrote: »

I hope you are aware there are two meanings of 'sitting tenant'.

Sometimes your arrogance is just too much to bear.

Two meanings? Really? I had no idea.

Thank you so much for putting me right mrg.

But you do realise that sarcasm is far more insulting than arrogance...

franklee

OP seriously check out exactly who you will be dealing with:
http://www.theguardian.com/money/2013/nov/09/lease-options-mortgage-pitfalls

DandelionPatrol

franklee wrote: »

OP seriously check out exactly who you will be dealing with:
http://www.theguardian.com/money/2013/nov/09/lease-options-mortgage-pitfalls

The risks identified in this article are to the Landlord-Seller.

Main pitfalls for the Tenant-Buyer are that the option is not so much an option as a contract to buy and that the contract to rent is not what it seems. As ever, read the small print and if you don't understand it, employ a lawyer.

princeofpounds

My guess (again I'm not sure) is that the rent would not constitute payment for the option (unless perhaps the agreement specifically stated the rent included an element towards the option)

It would, if the rental contract and the option contract were combined in one.


If they weren't then you would probably use a nominal sum of £1 in the option contract.


I have no idea why a landlord would seek to offer an option to buy to the tenant unless the tenant had requested one first. An option has a value (even if it's minimal), and it ends competitive bidding.




Personally I'd be happy to sign a contract that gave me an option but I would certainly want to understand the landlord's logic here, as something is a bit screwy.

franklee

DandelionPatrol wrote: »

The risks identified in this article are to the Landlord-Seller.

Main pitfalls for the Tenant-Buyer are that the option is not so much an option as a contract to buy and that the contract to rent is not what it seems. As ever, read the small print and if you don't understand it, employ a lawyer.

Of course the main risks are for the seller which is why in the OP's case it seems odd the seller is offering it. Given the OP will have funds to buy in 3/4 months time why not just do a straightforward purchase with completion end Dec/early Jan? It may be the seller is in financial difficulties like facing repossession in which case that would pull rank on the OP's tenancy especially of there was no consent to let. Therefore the OP should check out who they are dealing with and if any necessary consents are in place.

Other risks to the tenant/buyer are they pay over market rent and then cannot buy. If they are rushed into the property before surveying they may find they don't want to buy anyway and are stuck paying six months rent.

The article is useful to buyers as well as sellers as it shows how the options scams work and what the motivations of the parties are. That's why I suggested the OP check for a middleman (a high profile one Ben Rodgers is now bankrupt). The salesmen just want the deals done so they can get their cut regardless if it it's good for seller or buyer and are likely taking advantage of desperate sellers and naive buyers. Last thing the OP would want is a legal wrangle if the seller realises he's been done and gets cold feet. So I would certainty want to understand the process and to get to the bottom of who is offering the option and why before signing as a buyer.

princeofpounds wrote: »

I have no idea why a landlord would seek to offer an option to buy to the tenant unless the tenant had requested one first. An option has a value (even if it's minimal), and it ends competitive bidding.

Personally I'd be happy to sign a contract that gave me an option but I would certainly want to understand the landlord's logic here, as something is a bit screwy.

Agreed, I'd want to fully understand the situation, motivations and all the parties to the deal. Of course the OP's case may not be a scam but it seems odd to bother with an option in his case.