Definition: An arrangement combining a lease with an option that gives the option holder the right, but not the obligation, to buy under specified terms and within a stated period.
Example
A tenant leases a home and receives an option to buy it for a defined price before the option expires.
Keep the distinction clear
An option differs from a binding promise to purchase. Rent credits, option consideration, exercise requirements, and expiration depend on the agreement.
Related terms
Lease · Option Contract · Optionee
Keep studying
References: California DRE: glossary
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