Illinois Lease with Option to Purchase (Lease to Own) Agreement Form

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The Illinois Lease Agreement (with Option to Purchase) Agreement Form is a rental arrangement which shall give the tenant an opportunity to purchase the property they are leasing provided they meet certain criteria (such as never defaulting on the lease). Both parties will stand to gain from this lease type in that it will assure the landlord a satisfactory amount of money for taking a risk with the tenant while giving the tenant the opportunity to purchase the property with less paperwork, and at times a lower cost.

It should be noted this lease does not act like a purchase agreement unless and until the leaseholder informs the landlord/seller that he/she shall purchase the property and starts the process to do so within the time period specified in the lease that defines when the tenant is allowed to utilize the purchase option.  If the tenant does not he/she will forfeit a predetermined sum of money to the landlord, however, this money will be applied as a credit to the purchase, at the time of purchase, should he/she decide to purchase. This provides a much needed balance to the landlord/seller while allowing the tenant/buyer a certain flexibility in their final decision.

How to Write

Step 1 – In the first paragraph, several definitions will need to be established by the user. First, enter the date of the lease, then the full name of the seller/landlord, and the full name of the buyer/tenant.

Step 2 – Next, the second paragraph will define the premises itself. Enter the county where it is located then the state. Then enter the street address of the premises.

Step 3 – Item 1 is the “Rent” section. Here use the blank spaces provided to enter the annual rent (total rent received by landlord over the course of one year), the established monthly rent amount, the calendar day of the month the monthly rent shall be due, and the security deposit amount required by the landlord to enter this agreement.

Step 4 – “Utilities and Services” will seek to define what utility and service each party will be responsible for providing the property being rented. The first paragraph will require a list of utilities and services the tenant will be responsible for paying for be entered. The next paragraph will require a list of utility services the landlord will pay for during the lease to be entered.

Step 5 – The “Option Consideration” item will set the non-refundable fee that may only be used as a credit towards the purchase price (at the time of purchase) or forfeit to the landlord (should the tenant decide not to purchase). Enter this amount in the spaces provided.

Step 6 – In item 7, “Purchase Price,” enter the full purchase price of the property in the first two spaces provided. Then in the last two spaces provided enter the amount of money the seller/landlord shall credit the buyer/tenant (from the monthly rent payments) when the buyer/tenant purchases the property.

Step 7 – Next, locate item 17, known as “Governing Law and Venue.” Here, enter the county of Illinois that will have jurisdiction over this lease and the purchase agreement.

Step 8 – Finally the following parties must provide their signature and their printed name: Seller/Landlord, Buyer/Tenant, Agent, and Witness.