Lease Option Contract Law and Legal Definition

Lease option contract refers to an agreement under which a lessee has the right to purchase the leased item, either at the end of the lease term or within a specified period. This lease agreement allows a person to rent a home for a specific amount of time and then buy it shortly after the lease expires. Under this agreement, the homeowner can't sell the property as long as the lease is in effect, unless the renter fails to make the required rental payments. Payments which a renter obliged to pay include property taxes, insurance, and maintenance costs for the home.