How best to protectto interests in a lease to purchase option?
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How best to protectto interests in a lease to purchase option?
We are placing $10,000 on a lease to purchase for a $210,00 home. How can we protect our money in escrow and what do we need to look out for contractually?
Asked on October 3, 2011 under Real Estate Law, Tennessee
Answers:
FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
If you are placing ten thousand dollars ($10,000.00) on a lease option to purchase a home, the best way to protect your interests in this transaction is to have a written agreement prepared by a licensed attorney experienced in real estate to be signed by you and the landlord.
The ten thousand dollars ($10,000) option need to be placed in a third party escrow (not given to the landlord/seller for the duration of the option period where interest will accrue. You do not want the money going to the landlord/seller at this point.
You also need an memorandum memorializing the option to purchase the property signed by the landlord/seller before a notary public referencing your option to purchase this home recorded upon it so that on the chain of title there is notice of record concerning your option to purchase.
Good luck.
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