Maintain flexibility with your property: Commercial Lease with Option to Purchase
What is a Commercial Lease with Option to Purchase?
A Commercial Lease with Option to Purchase is an agreement to rent a commercial property where the tenant has the right to buy the rental property during the term of the lease. This type of lease is often used to secure a piece of commercial real estate while the tenant secures financing or saves the deposit necessary to purchase the property.
It's important to note that Option to Purchase Commercial Leases should only be used if both parties are intent on buying or selling the property. While the tenant is not required to purchase the property as part of the lease, they will forfeit the non-refundable option consideration paid to the landlord in exchange for the option.
When to use a Commercial Lease with Option to Purchase:
- You're a landlord with commercial property to lease, and want to give the tenant the option of purchasing.
- You'd like to purchase the commercial property you're renting.
- You own a property management company.
How do I get my Commercial Lease with Option to Purchase reviewed?
If you already have a Commercial Lease with Option to Purchase and want to have it reviewed, or if you have questions about creating or using one, there are a few ways to get help.
Use Rocket Copilot to ask questions or review your document; this helps you better understand what it says and identify anything that may need a closer look.
If you are looking for help from a Legal Pro, you can also ask a question and receive a response within one business day, or request a more in-depth document review.
Sample Commercial Lease with Option to Purchase
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Commercial Real Estate Lease With Option To Purchase
This Lease Agreement (this "Lease") is dated as of , by and between ("Landlord"), and the following tenants:
(the "Tenant")
Subject to the terms and conditions stated below the parties agree as follows:
PREMISES. Landlord, in consideration of the lease payments provided in this Lease, leases to Tenant (the "Premises") located at , , .
TERM. The lease term will begin on and will terminate on .
DEPOSIT AMOUNT. At the time of the signing of this Lease, Tenant shall pay to Landlord, in trust, a deposit of .
The deposit shall be applied as follows:
Security Deposit: to be held and disbursed for Tenant damages to the Premises or other defaults under this Agreement (if any) as provided by law.
Nonrefundable Option Consideration:
LEASE PAYMENTS. Tenant shall pay to Landlord Lease payments shall be made to the Landlord at , , , which address may be changed from time to time by the Landlord.
POSSESSION. Tenant shall be entitled to possession on the first day of the term of this Lease, and shall yield possession to Landlord on the last day of the term of this Lease, unless otherwise agreed by both parties in writing. At the expiration of the term, Tenant shall remove its goods and effects and peaceably yield up the Premises to Landlord in as good a condition as when delivered to Tenant, ordinary wear and tear excepted.
PROPERTY INSURANCE. Landlord shall be named as an additional insured in such policies. Tenant shall deliver appropriate evidence to Landlord as proof that adequate insurance is in force issued by companies reasonably satisfactory to Landlord. Landlord shall receive advance written notice from the insurer prior to any termination of such insurance policies. Tenant shall also maintain any other insurance which Landlord may reasonably require for the protection of Landlord's interest in the Premises. Tenant is responsible for maintaining casualty insurance on its own property.
MAINTENANCE. Landlord shall have the responsibility to maintain the Premises in good repair at all times.
MAINTENANCE. Tenant shall have the responsibility to maintain the Premises in good repair at all times during the term of this Lease.
MAINTENANCE.
During the Lease period, Landlord's obligations for maintenance shall include:
- the roof, outside walls, and other structural parts of the building
- the parking lot, driveways, and sidewalks, including snow and ice removal
- the sewer, water pipes, and other matters related to plumbing
- the electrical wiring
- the air conditioning system
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- all other items of maintenance not specifically delegated to Tenant under this Lease.
Tenant's obligations for maintenance shall include:
- the roof, outside walls, and other structural parts of the building
- the parking lot, driveways, and sidewalks, including snow and ice removal
- the sewer, water pipes, and other matters related to plumbing
- the electrical wiring
- the air conditioning system
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- all other items of maintenance not specifically delegated to Landlord under this Lease.
UTILITIES AND SERVICES. Landlord shall be responsible for all utilities and services incurred in connection with the Premises.
UTILITIES AND SERVICES. Tenant shall be responsible for all utilities and services incurred in connection with the Premises.
UTILITIES AND SERVICES.
During the Lease period, Landlord shall be responsible for the following utilities and services in connection with the Premises:
- electricity
- water and sewer
- gas
- heating
- garbage and trash disposal
- janitorial services
- telephone services
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Tenant shall be responsible for the following utilities and services in connection with the Premises:
- electricity
- water and sewer
- gas
- heating
- garbage and trash disposal
- janitorial services
- telephone service
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Tenant acknowledges that Landlord has fully explained to Tenant the utility rates, charges and services for which Tenant will be required to pay to Landlord (if any), other than those to be paid directly to the third-party provider.
LANDLORD'S INABILITY TO SUPPLY OR DELAY IN SUPPLYING SERVICE OR REPAIR TO TENANT. The obligation of Tenant to pay rent hereunder and to perform all other covenants shall not be excused because Landlord is unable to supply, or is delayed in supplying, any service or repair to be supplied by Landlord under the terms of this Lease, when such inability or delay shall be due to accident, or to the extensiveness of the alterations or repairs desirable or necessary to be made, or to Landlord's inability or difficulty in securing supplies or labor for the provision of such service, or to some other cause, rather than gross negligence on the part of Landlord. No diminution or abatement of rent, or other compensation, shall be claimed or allowed for inconvenience or discomfort arising from the making of repairs or improvements to the building.
EMINENT DOMAIN. If the whole or any part of the leased premises shall be taken by eminent domain, the term of this Lease shall terminate from the date title vests in the governmental authority. Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease. No part of any award shall belong to Tenant
DEFAULTS. Tenant shall be in default of this Lease if Tenant fails to fulfill any lease obligation or term by which Tenant is bound. Subject to any governing provisions of law to the contrary, if Tenant fails to cure any financial obligation within days (or any other obligation within days) after written notice of such default is provided by Landlord to Tenant, Landlord may take possession of the Premises without further notice (to the extent permitted by law), and without prejudicing Landlord's rights to damages. In the alternative, Landlord may elect to cure any default and the cost of such action shall be added to Tenant's financial obligations under this Lease. Tenant shall pay all costs, damages, and expenses (including reasonable attorney fees and expenses) suffered by Landlord by reason of Tenant's defaults. All sums of money or charges required to be paid by Tenant under this Lease shall be additional rent, whether or not such sums or charges are designated as "additional rent". The rights provided by this paragraph are cumulative in nature and are in addition to any other rights afforded by law.
CUMULATIVE RIGHTS. The rights of the parties under this Lease are cumulative, and shall not be construed as exclusive unless otherwise required by law.
RELATIONSHIP OF PARTIES. Landlord and Tenant shall not be considered or deemed to be joint venturers or partners and neither shall have the power to bind or obligate the other except as set forth herein.
OPTION TO PURCHASE. Tenant, upon satisfactory performance of this lease, shall have the option to purchase the real property described herein for a purchase price of , provided that the Tenant timely executes the option to purchase and is not in default of the Lease Agreement. Thereafter, each of the parties shall promptly execute any and all further instructions or other documents including a Sale Agreement which may be reasonably required. for purchase of the real property.
NOTICE REQUIRED TO EXERCISE OPTION. To exercise the Option to Purchase, the Tenant must deliver to the Landlord, a written notice of Tenant's intent to purchase. In addition, the written notice must specify a valid closing date. The closing date must occur before the original expiration date of the Lease Agreement.
OPTION CONSIDERATION. Nonrefundable option consideration paid by the Tenant as consideration for this Option to Purchase Agreement, shall be credited towards the purchase price at closing if the Tenant timely exercises the option to purchase.
EXCLUSIVITY OF OPTION. This Option to Purchase Agreement is exclusive and non-assignable and exists solely for the benefit of the named parties above. Should Tenant attempt to assign, convey, delegate, or transfer this option to purchase without the Landlord's express written permission, any such attempt shall be deemed null and void.
CLOSING AND SETTLEMENT. Tenant agrees that closing costs in their entirety, including any points, fees, and other charges required by the third-party lender, shall be the sole responsibility of Tenant. The only expense related to closing costs apportioned to Landlord shall be the pro-rated share of the ad valorem taxes due at the time of closing, for which Landlord is solely responsible.
FINANCING DISCLAIMER. THE PARTIES ACKNOWLEDGE THAT IT IS IMPOSSIBLE TO PREDICT THE AVAILABILITY OF OBTAINING FINANCING TOWARDS THE PURCHASE OF THIS PROPERTY. OBTAINING FINANCING SHALL NOT BE HELD AS A CONDITION OF PERFORMANCE OF THIS OPTION TO PURCHASE AGREEMENT. THE PARTIES FURTHER AGREE THAT THIS OPTION TO PURCHASE AGREEMENT IS NOT ENTERED INTO IN RELIANCE UPON ANY REPRESENTATION OR WARRANTY MADE BY EITHER PARTY.
REMEDIES UPON DEFAULT. If Tenant defaults under this Option to Purchase Agreement or the Lease Agreement, then in addition to any other remedies available to Landlord at law or in equity, Landlord may terminate this Option to Purchase by giving written notice of the termination. If terminated, the Tenant shall lose entitlement to any refund of rent or option consideration. For this Option to Purchase Agreement to be enforceable and effective, the Tenant must comply with all terms and conditions of the Lease Agreement.
RECORDING OF AGREEMENT. Tenant shall not record this Option to Purchase Agreement on the Public Records of any public office without the express and written consent of Landlord.
ACKNOWLEDGMENTS. The parties are executing this Option to Purchase Agreement voluntarily and without any duress or undue influence. The parties have carefully read this Option to Purchase Agreement and have asked any questions needed to understand its terms, consequences, and binding effect and fully understand them and have been given an executed copy.
GOVERNING LAW. This Lease shall be construed in accordance with the laws of the State of .
ENTIRE AGREEMENT/AMENDMENT. This Lease Agreement contains the entire agreement of the parties and there are no other promises, conditions, understandings or other agreements, whether oral or written, relating to the subject matter of this Lease. This Lease may be modified or amended in writing, if the writing is signed by the party obligated under the amendment.
SEVERABILITY. If any portion of this Lease shall be held to be invalid or unenforceable for any reason, the remaining provisions shall continue to be valid and enforceable. If a court finds that any provision of this Lease is invalid or unenforceable, but that by limiting such provision, it would become valid and enforceable, then such provision shall be deemed to be written, construed, and enforced as so limited.
WAIVER. The failure of either party to enforce any provisions of this Lease shall not be construed as a waiver or limitation of that party's right to subsequently enforce and compel strict compliance with every provision of this Lease.
BINDING EFFECT. The provisions of this Lease shall be binding upon and inure to the benefit of both parties and their respective legal representatives, successors and assigns.
SIGNATURES AND NOTICE. This Lease shall be signed by the following parties. No notice under this Lease shall be deemed valid unless given or served in writing and forwarded by mail, postage prepaid, addressed to the parties below:
LANDLORD:
,
TENANT:
Such addresses may be changed from time to time by either party by providing notice as set forth above. Notices mailed in accordance with the above provisions shall be deemed received on the third day after posting.
LANDLORD:
| By: | Date: |
TENANT:
| By: | Date: |
State laws vary on the amount that may be charged as a late payment fee. Consult an attorney to determine whether limits apply in your state.
Consult an attorney to determine whether the laws of your state limit the amount that may be charged for checks returned due to non-sufficient funds.
Commercial Lease with Option to Purchase FAQs
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Is this Commercial Lease Option Contract legally binding under state law?
Yes, a Commercial Lease Option Contract is a binding contract and is enforceable by law. Once signed, both parties are obligated to follow the terms outlined in the agreement until it expires.
Creating a legally enforceable Commercial Lease Option Contract is simple with Rocket Lawyer. If you need additional support, you can connect with a Legal Pro, or you can get quick answers or request a fast document review from Rocket Copilot.
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Do landlords have to create Commercial Lease Option Contracts?
Even if you are offering the property to an acquaintance, it is always a good idea to use a Commercial Lease With Option To Purchase. You might opt to use a Commercial Lease With Option To Purchase because, when made properly, it presents the following list of benefits:
- Roles and responsibilities are understood by all
- The duration of the tenancy is agreed upon
- Rent payment requirements are clearly defined
If you don't have this document, you and your tenant may experience any of the following repercussions: unpredictable property damage, challenges collecting rent payments, and, not to mention, almost no ability to demand a remedy if something were to go wrong.
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How should the main contents of a Commercial Lease With Option To Purchase template be organized?
The details needed for making your Commercial Lease With Option To Purchase are:
- The address and description of your property
- The legal name of each inhabitant
- What rent and other fees will be charged and when they are due
- What utilities and/or amenities will be included
- What the start and end dates are for the lease
Your document will also include language related to invited visitors, late payments, animals, smoking, and moving out before the rental period ends. While making your document, you also will be able to add information related to maintenance procedures, insurance requirements, and furnishings. Using the document tool, you have the power to add more customization, if necessary.
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How much would I usually need to pay for a lawyer to draft a Commercial Lease With Option To Purchase?
Attorney fees for drafting or reviewing a Commercial Lease with Option to Purchase can vary widely. Many lawyers charge hourly rates that may range from around $100 for less experienced attorneys to $350 or more per hour for highly experienced attorneys in major metropolitan areas. For more routine documents, some attorneys may offer flat-fee pricing.
The total cost will depend on several factors, including your location, the attorney’s experience, and the complexity of your agreement. More documents or situations involving negotiation will typically require more time and increase the overall cost.
With Rocket Lawyer, you can create a personalized Commercial Lease with Option to Purchase tailored to your specific needs—without the high cost typically associated with hiring a lawyer. If you have questions or want additional peace of mind, you can also get your document reviewed or ask a Legal Pro for guidance.
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Are there any next steps to take after I draft a Commercial Lease With Option To Purchase?
To make your Commercial Lease With Option To Purchase legally binding, you must sign it. RocketSign® makes the online signature process easy. You also will be able to copy, print out, and/or download it as necessary. After signing, make sure that your tenant receives copies of the fully executed agreement. Also, feel free to take a look at more real estate legal documents in our library.
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How will local rental laws affect my Commercial Lease?
local rental laws can impact key parts of your lease, including security deposits, tenant rights, notice requirements, and landlord responsibilities. Because laws can change and may vary by location, it’s important to make sure your agreement reflects current requirements.
If you have questions, you can Consult a Legal Pro for guidance or a document review. With Rocket Lawyer, you can also use Rocket Copilot to better understand your lease, identify potential issues, and make sure everything looks correct.
Whether you’re creating a new local Lease Agreement or reviewing an existing one, Rocket Lawyer provides tools and support to help you move forward with confidence.
