A California rent-to-own agreement extends beyond a conventional lease, offering tenants the exclusive option to purchase the property at a predetermined price. Prospective tenants typically need to fill out a rental application to initiate this process. This helps the landlord evaluate the tenant’s suitability and background before entering into the agreement.
A unique feature of this arrangement is its financial flexibility, allowing a portion of the monthly rent to contribute toward the property’s future purchase; nevertheless, there is no obligation for the tenant to proceed. However, any deposit and down payment are forfeited in the event the tenant decides against the acquisition. If the tenant chooses to buy the property, a residential purchase agreement will be executed detailing the terms and conditions of the sale.
Landlord-Tenant Laws: Civil Code – Division 3, Part 4, Title 5, Chapter 2 (Hiring of Real Property).
Purchase Agreement Laws: Civil Code – Division 2, Part 4 (Acquisition of Property).
