Landlord Question and Answer Forum

I am a new landlord by necessity and have made a few mistakes already. Have a tenant renting my condo and she wishes to purchase the unit. Used the stock and custom forms to craft a doc where after 2 years, a portion of the monthly rent will be applied to the purchase price of the condo. If after 24 months from date of agreement, the tenant does not settle on the property, she will forfeit the agreed down payment and security deposit . Make sense? Any thoughts?

I personally wouldn't apply her rent towards the purchase, because it incentivizes her to stay a tenant and wait to purchase. I would write a one year lease agreement that states a discounted purchase price, and states that the discounted price is only available if she purchases within the term (whether 12 months, 18 months, 24 months, etc). That assumes, of course, that you actually want to sell the unit. If you don't want to sell the unit, then don't include a price in the lease agreement, so you can decide later on whether you want to make it attractive for her to buy.

Posted by Gregory T, CA on Monday, October 25, 2010