A lease to own agreement is a rental contract that also gives the tenant the option to buy the property later. It lets the landlord earn rent while the tenant builds savings and credit. Create one online with the form below, or fill out our free lease agreement template step by step.
Last Updated: October 2026. This guide is reviewed and updated regularly to reflect current law. If you notice an error or outdated information, please contact us.
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A rent-to-own agreement is a typical residential rent contract with an additional clause or paragraph that gives the tenant the right to buy the property at the end of the contract’s lease term. In a sense, the tenant “reserves” the property for a period of time until he or she can prepare the necessary documents or improve his or her financial capacity to make the purchase.
Here are some useful definitions regarding this type of contract:
Rent-to-own contracts come in three common forms: a lease option, a lease purchase and an option to purchase. They share one basic idea, but they differ in how firmly the tenant is tied to the final sale and in how long the arrangement runs. The sections below describe each one.
In a lease option, the buyer or tenant signs into a contract stating that he or she may have the option to buy the home after a few years. However, he or she is not legally obligated to push through with the purchase and acknowledges that the extra rental payments will be forfeited. In this type of agreement, the purchase price is usually discussed toward the end of the lease term.
A lease-purchase agreement has almost the same setup, but the buyer is often obliged to continue with the purchase once the rental agreement expires. At the beginning of the contract, he or she signs two agreements—one, a lease agreement, and two, a typical residential agreement. In this type of contract, the landlord and the tenant agree on a fixed price for the purchase price.
An option to purchase agreement is normally short-term and gives the buyer enough time to gather funds. This type of agreement grants him or her the exclusive right to buy the property after a few months. If they do not want to proceed with the purchase, they may simply sell the right to another party or simply let it expire. In the same way, the fee will not be returned by the landlord.
Though rent-to-own agreements have their unique advantages, they also come with tons of complications. It’s therefore necessary to balance out its pros and cons before signing into such a contract.
Once you have talked about the details of the lease agreement, such as rent payment and responsibilities, take some time to prepare before anyone signs. The checks below are split into one list for the landlord and one for the tenant.
| Document Name | Lease to Own Agreement Form |
| Other Names | Rent to Own Contract, Lease with Option to Buy |
| Avg. Time to Fill Out | 18 minutes |
| # of Fillable Fields | 109 |
| Available Formats | Adobe PDF |
The steps below follow the FormsPal template this page hands out (the PDF), in the order the form is printed. It is a 14-page fillable PDF with 109 fields, so fill in only what fits your arrangement.
The screenshots under each step show the FormsPal Lease to Own Agreement template filled with sample entries in blue, so you can see where each answer goes. The names, addresses, dates and amounts are examples only.
Have these details ready before you start:
On page 1 type the Effective Date, the Landlord and the Tenant. Enter the street address (with the unit number if any), and the Project name if the premises sit in a development. In Section 1 check the guarantee box (and name who signs the Guarantee Agreement) or the no-guarantee box. In Section 2 type what the premises will be used for.
On page 2 type the Occupancy Date in Section 3. In Section 4 check the term options that apply and type the number of months. If you use renewal options, enter how many, how many years each, the number of days, and either the same-rent box or the rent amount and period.
At the top of page 3 check the renewal box on mutual approval if it applies. In Section 5(a) type the monthly Base Rent amount, the day of the month it is due and the address where it is paid.
In Section 5(b) check each Additional Rent item that applies (utilities, pet rent, common area maintenance, property taxes, insurance, other) and type its amount, or check No Additional Rent. In 5(c) type the late fee per day. In Section 6 type the security deposit amount.
Write the amount of security deposit (up to 150% of the monthly rent) on the second line.
In Section 9 on page 4 type the percentage of Rent that applies if the Tenant does not vacate when the Lease ends.
In Section 10(d) on page 5 write any other defaults you want listed. The form says to fill this line only if applicable.
In Section 14(a) on page 6 the form says to check all that apply. Check the all-risks property insurance box if it is among the coverages.
On page 7 continue Section 14(a): check each remaining coverage that applies (commercial general liability with its dollar limit, boiler and machinery, workers' compensation, automobile liability, other hazards) and type the combined single limit amount.
It is best to consult an insurance broker who will assess the proper coverage for the rental property.
In Section 15 on page 8 check the box for the Tenant's obligation to repair and maintain or the Landlord's obligation, not both. Use the lines at the bottom for any specific maintenance and repair provisions.
For rent-to-own agreements, the tenant normally shoulders all costs.
In Section 17 on page 9 check the email box if email may also be used. Fill in the Landlord's contact information, Tel and Email and its With a copy to lines, then the Tenant's contact information, Tel and Email.
Still in Section 17 on page 9, fill the Tenant's With a copy to lines with the name or address, Tel and Email of the person who should receive a copy.
In Section 18 on pages 9 to 10 check one purchase price box: a stated sum, the MAI appraised value, a calculation you write out, or a price set later by agreement. In 18(b) type the two dates that start and end the Exercise Period. In 18(c) name who bears the cost of any subdivision or similar work.
Finally, part C’s last line must contain either the word “TENANT” or “LANDLORD”, who will then be responsible for any costs incurred for the sale to happen.
On page 12, under IN WITNESS WHEREOF, the Landlord and the Tenant each sign on the By line, then add the title on Its and the printed name on Name. The page has signature, title and name lines for each party.
On page 13 complete Rider A. In the Landlord's part check (a)(i) and explain, or (a)(ii). Check (b)(i) and list the documents, or (b)(ii). The Tenant then initials (c) and (d) in the Tenant's Acknowledgment.
On page 14 the Landlord signs on By and adds Its and Name, and the Tenant signs on By and adds Name, to confirm the lead paint statement is accurate.
After the last blank is filled in, the form is ready to review, sign and share. Go through these steps in order so that both parties end up with the same finished copy.
Should you need to change any of the above sections, it is best to consult with a lawyer with a real estate background.
Just like any other residential contract, a rent-to-own agreement comes with riders for the benefit of both the landlord and the tenant. This will ensure that necessary disclosures are made such as:
You will find these at the end of the rent-to-own agreement template.
The screenshots show sample entries only. Type your own names, addresses, dates and amounts in every blank.
You may go online to check different platforms. Most online property rental or buy-and-sell websites now have filters for landlords who are open to rent-to-own arrangements. Alternatively, you may ask your potential landlord if he or she is open to such an agreement.
Depending on your agreement, either party may pay for property taxes. Our rent-to-own agreement template is editable so that you can easily revise depending on your landlord’s or tenant’s preference.
Unlike a mortgage or a loan, a rent-to-own set-up will not help improve your credit history since you are directly purchasing the home. However, should bank financing come into play, you may indeed use this opportunity to increase your finances.
Yes. Use the Create My Document button on this page to answer a few questions and build the document online. You can also download the PDF and fill it in or edit it with our PDF editor.
The FormsPal template takes about 18 minutes on average and has 109 fillable fields. Have these details ready:
General information, not legal or tax advice.
