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Option to Lease

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					An Option to Lease is an agreement between a tenant and a landlord for a tenant to
occupy a rental premises with an option to purchase the premises at the end of the term
of the lease. This document in its draft form contains numerous of the standard clauses
commonly used in this type of option; however, additional language may be added
allowing for customization to ensure the specific language of the parties is addressed.
A rental property with an option to lease is useful for the tenant who wishes to purchase
the property in the future but does not have the money immediately available.
                           OPTION TO LEASE AGREEMENT
This Agreement is made as of ________________, 2_____ (the "Effective Date"), by and
between_____ ________________________________(“Optionor”) and
________________________________________ (“Optionee”).
                                                       Recitals:
A.       The Optionor is the owner with a good and marketable title in fee simple to the Optioned
         Premises (as defined herein), free and clear of encumbrances, except as provided for
         herein.

B.       The Optionor has agreed to grant options to lease the Optioned Premises in favor of the
         Optionee, upon the terms and conditions set out herein.

        NOW THEREFORE in consideration of the mutual covenants contained herein, other
good and valuable consideration, and the sum of ________ ($_____) now paid by the Optionee
to the Optionor, the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1.       Truth of Recital A

The Optionor hereby represents and warrants to the Optionee that Recital A is true in substance
and in fact.
2.       Description of Optioned Premises

The lands and premises (the “Optioned Premises”) are more particularly described on
Schedule “A” annexed hereto.
3.       Grants of Option Relating to Optioned Premises

The Optionor hereby grants to the Optionee an exclusive, irrevocable option to lease the
Optioned Premises (or a portion thereof, as provided herein) on the terms set out in this
Agreement (the "Option to Lease").
4.       Term of Option to Lease and Grant and Term of Subsequent Option to Lease

         (a)      The Optionee may exercise the Option to Lease by written notice (the “Exercise
                  Notice”) to the Optionor at any time until the ___ day of ________, 2____ (the
                  "Option to Lease Period"). The Optionee shall be entitled in the Exercise Notice
                  to stipulate all or a portion of the Optioned Premises as being the lands subject to
                  the exercise of the option (the “Initial Exercise Premises”), by sketch or map
                  attached to the Exercise Notice delineating such Initial Exercise Premises.

         (b)      In the event that pursuant to the Exercise Notice the Initial Exercise Premises are
                  less than the Optioned Premises, then with respect to the remainder of the
                  Optioned Premises (the “Excluded Premises”), the Optionor hereby grants to the
                  Optionee a continuing exclusive, irrevocable option to lease the Excluded
                  Premises (or a portion thereof as provided herein) on the terms set out in this


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                  Agreement (the “Subsequent Option to Lease”). The Optionee may exercise the
                  Subsequent Option to Lease by written notice (the “Subsequent Exercise Notice”)
                  to the Optionor at any time until the ____ day of ________, 2_____ (the
                  “Subsequent Option to Lease Period”). In the event the Optionee delivers the
                  Subsequent Exercise Notice, the Optionee shall be entitled to exercise its option
                  in respect of a portion of the Excluded Premises, provided that the remainder of
                  the Excluded Premises are not subject to the exercise of such option (the
                  “Subsequently Excluded Premises”).

         (c)      Provided that the Optionor shall be permitted to continue to market and offer the
                  Excluded Premises or any part thereof for lease and/or sale to a third party or third
                  parties and if a satisfactory offer to lease or sell the Excluded Premises or any part
                  thereof is received by the Optionor (the “Acceptable Offer”), the Optionor may
                  notify the Optionee in writing thereof and the Optionee shall be required within
                  ninety (90) days from _____ p.m. on the date of receipt of the said notice to
                  provide a Subsequent Exercise Notice of its intention to exercise the Subsequent
                  Option to Lease, failing which, the Optionor may terminate the Su
				
DOCUMENT INFO
Description: An Option to Lease is an agreement between a tenant and a landlord for a tenant to occupy a rental premises with an option to purchase the premises at the end of the term of the lease. This document in its draft form contains numerous of the standard clauses commonly used in this type of option; however, additional language may be added allowing for customization to ensure the specific language of the parties is addressed. A rental property with an option to lease is useful for the tenant who wishes to purchase the property in the future but does not have the money immediately available.
This document is also part of a package Residential Landlord Toolkit 21 Documents Included