What is the rent with option to purchase?
14 Oct 2019
Due to the current economic and labor situation in Spain, new business models appear in the real estate sector. Although it is not the first time it has been carried out, the lease with purchase option is booming. This contract allows the tenants of a home to buy this property after a specified time. In this way, buyers' investment is more comfortable and allows them to live in their future home from day one.
The rental contract with option to purchase has become very popular especially among young people, who prefer this model due to its facilities when making the first purchase investment. One of the reasons is the fact that once the rental contract is over, the amount paid as a tenant will be subtracted from the price of the property. In this case, it is important to keep in mind that the purchase must be made once the stipulated rental time has ended or, otherwise, the initial payment as well as the monthly payment cannot be recovered.
Although it is accepted and recognized in the Mortgage Regulations and the Urban Leasing Law (LAU in Spanish), it is an atypical contract. It is characterized by the absence of a regulation in the Civil Code, so it is governed mainly by the agreement between the parties. For this reason, it is necessary to know some of the main sections that should be reviewed during its preparation:
The lease with purchase option is composed of two subcontracts: rent and sale. It is a great business model for buyer and seller, as long as the sale is carried out after the rental time. In any case, it is also positive for the tenant not to be committed to the purchase if he/her finally does not wish to acquire the property. For the preparation of the contract, all possible cases are taken into account, such as the loss of the option to purchase by the tenant if there is a delay in the payment of the rent of more than two months.
Habitat Real Estate can make a rent with option to buy contract for some of the properties in portfolio. We are committed to our clients and therefore we advise them throughout the process so that they understand what type of investment they are carrying out and what are all its benefits and disadvantages.
If you are interested in renting a home on the Costa Blanca with option to buy you can contact us at email@example.com or by calling 966 720 250.