Alabama Lease to Own (Option to Purchase) Agreement

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The Alabama lease to own contract allows a tenant that is interested in the possibility of purchasing residential property to be able to live on the property, pay rent, and then decide with a specified period of whether to purchase at a predetermined price. This form must be written in accordance with State law (For leasing: Title 35, Chapter 9A) and the landlord should supply the tenant/buyer a completed Property Condition Disclosure Form (PDF | Word) before lease commencement date.

How to Write

Step 1 – The landlord and tenant should negotiate the following before the contract is written:

  • Monthly Lease Amount (rent)
  • Start and End Date
  • Period the Buyer has the Right to Purchase the Property
  • Purchase Price

Step 2 – In accordance with Title 35, Chapter 9A begin filling-in the document by entering the following in the header area;

  • Date of agreement
  • The Parties; Landlord/seller & Tenant/buyer details including full name(s) and addresses
  • List the county the property is located in addition to its address

Step 3 – Moving to the contents of the contract the following will need to be written;

  • Rental amount – Listed on an annual and monthly basis along with the day of every month to which it is due.
  • Utilities – Which party, landlord or tenant, will responsible for covering the utilities on the premises.
  • Term of Option – Period for which the tenant may have the right to purchase the property.
  • Consideration – The payment for having the option available to the buyer. Most States require some sort of valued consideration with usually $100 set as a minimum.
  • Purchase – List the price that the buyer has the right to acquire the real estate.
  • Authorization – Both landlord and tenant should sign the agreement with at least one (1) witness in the case of a dispute.

Exercising the Option – If and when the tenant is ready to exercise their right to purchase the property they must send an official notice to the landlord. Before doing this, they should secure financing a and before the closing date perform all necessary inspections.


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