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Lease to Own Agreement - California

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Lease to Own Agreement - California Powered By Docstoc
					This lease agreement is made between a landlord and a tenant to lease real property
and grants the tenant a rent to own option. This document contains the material terms
of the lease agreement including the rent amount, the term of the tenancy, and the
permitted uses of the premises. It also includes a rent to own option which gives the
tenant the option to purchase the property within a specified period under the terms
stated in the agreement. Many of the standard clauses commonly used in these types
of agreements are included in this document, but it may be customized to ensure that
the specific understandings of the parties are properly set forth. This lease agreement
should be used by a landlord and a tenant when entering into a residential lease with an
option to purchase.
                         California Residential Lease Agreement
THIS LEASE AGREEMENT (hereinafter referred to as the “Agreement” and/or the “Lease”)
made and entered into this ___ day of _________, 20__, by and between
____________________ (hereinafter referred to as “Landlord”) with an address of
___________________________ and __________________ (hereinafter referred to as
“Tenant”).

WITNESSETH:

        WHEREAS, Landlord is the fee owner of certain real property being, lying and situated
in ___________ County, California, such real property having a street address of
_____________________________, [Insert City], CA [Insert Zip Code] (hereinafter referred to
as the “Premises”).

        NOW, THEREFORE, for and in consideration of the sum of the covenants and
obligations contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

1.     TERM. Landlord leases to Tenant and Tenant leases from Landlord the above described
Premises together with any and all appurtenances thereto, for a term of ___ months, such term
beginning on [Insert Date] and ending at 12 o'clock midnight on [Insert Date].

2.    RENT. The total rent for the Term shall be the sum of __________________
DOLLARS ($__________) payable on the ____ day of each month of the Term. All such
payments shall be made to Landlord at Landlord's address as set forth in the preamble to this
Agreement on or before the due date and without demand.

3.     DAMAGE DEPOSIT. Upon the due execution of this Agreement, Tenant shall deposit
with Landlord the sum of _________________ DOLLARS ($__________) receipt of which is
hereby acknowledged by Landlord, as security for any damage caused to the Premises during the
term hereof. Such deposit shall be returned to Tenant, without interest, and less any set off for
damages to the Premises upon the termination of this Agreement.

4.     USE OF PREMISES. The Premises shall be used and occupied by Tenant(s) consisting
of [INSERT NAMES AND AGES OF ALL TENANTS], exclusively, as a private single family
dwelling, and no part of the Premises shall be used at any time during the term of this Agreement
by Tenant for the purpose of carrying on any business, profession, or trade of any kind, or for
any purpose other than as a private single family dwelling. Tenant shall not allow any other
person, other than Tenant's immediate family or transient relatives and friends who are guests of
Tenant, to use or occupy the Premises without first obtaining Landlord's written consent to such
use. Tenant shall comply with any and all laws, ordinances, rules and orders of any and all
governmental or quasi-governmental authorities affecting the cleanliness, use, occupancy and
preservation of the Premises.




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5.      CONDITION OF PREMISES. Tenant stipulates, represents and warrants that Tenant
has examined the Premises, and that they are at the time of this Lease in good order, repair, and
in a safe, clean and Tenantable condition. Tenant has three (3) days from the start date to notify
Landlord in writing of any defects on the Premises.

6.       ASSIGNMENT AND SUB-LETTING. Tenant shall not assign this Agreement, or sub-
let or grant any license to use the Premises or any part thereof without the prior written consent
of Landlord.

7.      ALTERATIONS AND IMPROVEMENTS. Tenant shall make no alterations to the
buildings or improvements on the Premises or construct any building or make any other
improvements on the Premises without the prior written consent of Landlord. Any and all
alterations, changes, and/or improvements built, constructed or placed on the Premises by Tenant
shall, unless otherwise provided by written agreement between Landlord and Tenant, be and
become the property of Landlord and remain on the Premises at the expiration or earlier
termination of this Agreement.

8.       UTILITIES. Tenant shall be responsible for arranging for and paying for all utility
services required on the Premises, with the exception of [Insert any utilities for which the Tenant
is not responsible].

9.     MAINTENANCE AND REPAIR; RULES. Tenant will, at its sole expense, keep and
maintain the Premises and appurtenances in good and sanitary condition and repair during the
term of this Agreement and any renewal thereof.

10.     DAMAGE TO PREMISES. In the event the Premises are destroyed or rendered wholly
uninhabitable by fire, storm, earthquake, or other casualty not caused by the negligence of
Tenant, this Agreement shall terminate from such time except for the purpose of enforcing rights
that may have then accrued hereunder. The rental provided for herein shall then be accounted
for by and between Landlord and Tenant up to the time of such injury or destruction of the
Premises, Tenant paying rentals up to such date and Landlord refunding rentals collected beyond
such date. Should a portion of the Premises thereby be rendered uninhabitable, the Landlord
shall have the option of either repairing such injured or damaged portion or terminating this
Lease. In the event that Landlord exercises its right to repair such uninhabitable portion, the
rental shall abate in the proportion that the injured parts bears to the whole Premises, and such
part so injured shall be restored by Landlord as speedily as practicable, after which the full rent
shall recommence and the Agreement continue according to its terms.

11.     INSPECTION OF PREMISES. Landlord and Landlord's agents shall have the right at
all reasonable times during the term of this Agreement and any renewal thereof to enter the
Premises for the purpose of inspecting the Premises and all buildings and improvements thereon.
And for the purposes of making any repairs, additions or alterations as may be deemed
appropriate by Landlord for the preservation of the Premises or the building.

12.    SUBORDINATION OF LEASE. This Agreement and Tenant's interest hereunder are
and shall be subordinate, junior and inferior to any and all mortgages, liens or encumbrances


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now or hereafter placed on the Premises by Landlord, all advances made under any such
mortgages, liens or encumbrances (including, but not limited to, future advances), the interest
payable on such mortgages, liens or encumbrances and any and all renewals, extensions or
modifications of such mortgages, liens or encumbrances.

13. TENANT'S HOLD OVER. If Tenant remains in possession of the Premises with the
consent of Landlord after the natural expiration of this Agreement, a new tenancy from month-
to-month shall be created between Landlord and Tenant which shall be subject to all of the terms
and conditions hereof except that rent shall then be due and owing of _________________
DOLLARS ($__________) per month and except that such tenancy shall be terminable upon
thirty (30) days written notice served by either party. Such notice may be given on any date.

14.    SURRENDER OF PREMISES. Upon the expiration of the term hereof, Tenant shall
surrender the Premises in as good a state and condition as they were at the commencement of
this Agreement, reasonable use and wear and tear thereof and damages by the elements excluded.

15.     ANIMALS. Tenant shall be entitled to keep no more than [INSERT PETS THAT ARE
ALLOWED, IF NOT PETS THAT INDICATE “NONE”]; however, at such time as Tenant shall
actually keep any such animal on the Premises. Tenant shall pay to Landlord a pet deposit of
____________ DOLLARS ($__________), which shall be refundable and shall be used upon the
termination or expiration of this Agreement for the purposes of cleaning the carpets of the
building if necessary.

16.      OPTION. (Rent To Own Option Only)

       16.1 For additional consideration in the sum of $___________ (“Option Money”), paid
by the Tenant to the Landlord upon the execution of this Lease, Landlord grants to Tenant the
exclusive right and option to purchase the Premises upon the terms set forth herein.

         16.2 Tenant shall be entitled to exercise its option to purchase at any time within the
first 12 months of the Term for the stated price in Paragraph 17. Said price will be adjusted up
____% of the stated price from the 13th month to the 24th month. These provisions are only
deemed pertinent if Tenant is not in default under the terms of the Lease.

        16.3 Tenant may exercise its option to purchase if (i) Tenant gives Landlord written
notice at any time during the lease term, and (ii) Tenant purchases the Premises under the terms
of this Agreement no later than 45 days after giving written notice of its intent to exercise the
option.

17.      PURCHASE PRICE. (Rent To Own Option Only)

        17.1 The Purchase Price to be paid by Tenant to Landlord for the Premises in the event
Tenant exercises its option shall be the sum of $__________________. [Instruction: It is highly
recommended that the Parties enter into a separate Residential Purchase Agreement that
details the remaining terms of Tenant’s intent to purchase at the time the option is exercised




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that includes any contingencies, for example, appraisal, physical inspections or loan
approval.]

17.2 The Tenant shall be entitled to a credit toward the Purchase Price of the Option Money
paid. If offered by Landlord, for the purposes of this Agreement, the “principal portion” of a rent
payment shall be the amount by which the Purchase Price would have been decreased if the rent
payments had been applied first to any unpaid late charges or other costs that Tenant is obligated
for hereunder, second to interest at _____ percent per annum that would have accrued against the
balance of the Purchase Price through the date of each rent payment, and finally toward reducing
the Purchase Price, i.e., the “principal amount.”

17.3     Principal Deduction on Payment offered by landlord: YES OR           NO

17.4 The Tenant shall pay the Landlord any remaining balance of the Purchase Price in cash at
closing.

17.5 Landlord has the right at any time during the term of this Lease to list to sell the
Premises. Tenant is responsible to cooperate in showing this home. Owner will only market the
home for sale if a new buyer will honor the existing option provisions of this Lease with Tenant.
All option money will be credited or transferred to the new buyer if property is sold. If Tenant is
in default for any reason on this Lease prior to the sale of the Premises to a new buyer, the new
owner will have full authority to evict Tenant at will and terminate this Lease.

18.      CONDITIONS OF CLOSING. (Rent To Own Only)

Landlord shall convey good and marketable title by warranty deed to Tenant subject only to: (i) a
lien for any and all real property taxes and assessments not then delinquent; (ii) easements and
restrictions of records; and (iii) all liens and encumbrances or matters affecting the condition of
title to the Premises created by or with the written consent of Tenant, or resulting from the acts
or omissions of Tenant. In the event Landlord is unable to deliver such marketable and insurable
title to Tenant, Tenant shall have the option of terminating its rights under this Agreement and
vacating the Premises, in which event Landlord shall return to Tenant the Option Money, less
any amount due the Landlord pursuant to this Agreement; or continuing to lease the Premises for
the remaining term of the Lease.

19.      CLOSING. (Rent To Own Only)

19.1 The Landlord and Tenant hereby appoint [Insert names of escrow company and title
company] as the escrow company and title company who will handle the purchase transaction
contemplated between Landlord and Tenant.

19.2 At closing, the Landlord shall pay (i) the premium for a standard owner’s policy of title
insurance, and (ii) one-half of the escrow fees and closing costs. The Tenant shall pay (i) the
Purchase Price less any credits permitted herein, (ii) the difference between the premium for an
ALTA mortgagee’s policy of title insurance or its equivalent and the premium of an owner’s
policy of title insurance, (iii) one-half of the escrow fees and closing costs, and (iv) any and all



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costs and fees incurred by Tenant in order to obtain financing, including without limitation:
appraisal fees, loan document preparation, flood certification fee, tax service fee and inspection
fees, and (v) any unpaid amounts due Landlord from Tenant hereunder . Real property taxes,
rents and other items subject to proration shall be prorated as of closing.

19.3     Upon completion of the closing, all Lease provisions herein shall be deemed terminated.

20.     INDEMNIFICATION. Landlord shall not be liable for any damage or injury of or to
the Tenant, Tenant's family, guests, invitees, agents or employees or to any person entering the
Premises or the building of which the Premises are a part or to goods or equipment, or in the
structure or equipment of the structure of which the Premises are a part, and Tenant hereby
agrees to indemnify, defend and hold Landlord harmless from any and all claims or assertions of
every kind and nature.

21.     DEFAULT. If Tenant fails to comply with any of the material provisions of this
Agreement, other than the covenant to pay rent, or of any present rules and regulations or any
that may be hereafter prescribed by Landlord, or materially fails to comply with any duties
imposed on Tenant by statute, within seven (7) days after delivery of written notice by Landlord
specifying the non-compliance and indicating the intention of Landlord to terminate the Lease by
reason thereof, Landlord may terminate this Agreement.       If Tenant fails to pay rent when due
and the default continues for seven (7) days thereafter, Landlord may, at Landlord's option,
declare the entire balance of rent payable hereunder to be immediately due and payable and may
exercise any and all rights and remedies available to Landlord at law or in equity or may
immediately terminate this Agreement.

22.    LATE CHARGE. In the event that any payment required to be paid by Tenant
hereunder is not made within three (3) days of when due, Tenant shall pay to Landlord, in
addition to such payment or other charges due hereunder, a "late fee" in the amount of _______
DOLLARS ($_______).

23.     ATTORNEYS' FEES. Should it become necessary for Landlord to employ an attorney
to enforce any of the conditions or covenants hereof, including the collection of rentals or
gaining possession of the Premises, Tenant agrees to pay all expenses so incurred, including a
reasonable attorneys' fee.

24.    GOVERNING LAW. This Agreement shall be governed, construed and interpreted by,
through and under the Laws of the State of California.

25.     SEVERABILITY. If any provision of this Agreement or the application thereof shall,
for any reason and to any extent, be invalid or unenforceable, neither the remainder of this
Agreement nor the application of the provision to other persons, entities or circumstances shall
be affected thereby, but instead shall be enforced to the maximum extent permitted by law.

26.     BINDING EFFECT. The covenants, obligations and conditions herein contained shall
be binding on and inure to the benefit of the heirs, legal representatives, and assigns of the
parties hereto.


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27.   MODIFICATION. The parties hereby agree that this document contains the entire
agreement between the parties and this Agreement shall not be modified, changed, altered or
amended in any way except through a written amendment signed by all of the parties hereto.

28.    NOTICE. Any notice required or permitted under this Lease or under state law shall be
deemed sufficiently given or served if sent by United States certified mail, return receipt
requested, addressed as follows:

If to Landlord to: [INSERT NAME AND ADDRESS]

If to Tenant to: [INSERT NAME AND ADDRESS]



LANDLORD: [INSERT NAME]


Sign: ___________________________________ Date: ______________


TENANT: [INSERT NAME]

Sign: ___________________________________ Date: ______________




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DOCUMENT INFO
Description: This lease agreement is made between a landlord and a tenant to lease real property and grants the tenant a rent to own option. This document contains the material terms of the lease agreement including the rent amount, the term of the tenancy, and the permitted uses of the premises. It also includes a rent to own option which gives the tenant the option to purchase the property within a specified period under the terms stated in the agreement. Many of the standard clauses commonly used in these types of agreements are included in this document, but it may be customized to ensure that the specific understandings of the parties are properly set forth. This lease agreement should be used by a landlord and a tenant when entering into a residential lease with an option to purchase.
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