Fixed-Price Lease-Purchase Option

### What does a Fixed-Price Lease-Purchase Option agreement primarily entail? - [x] An option to purchase the leased property at a predetermined price within a specific time period. - [ ] A requirement for the tenant to buy the property at the end of the lease. - [ ] A rent adjustment clause based on market conditions. - [ ] A rental refund if the tenant chooses not to buy the property. > **Explanation:** A Fixed-Price Lease-Purchase Option grants the tenant the right, but not the obligation, to buy the property at a set price within a designated period. ### Who decides the predetermined purchase price in a Fixed-Price Lease-Purchase Option? - [x] It is negotiated and agreed upon by tenant and landlord before signing the lease agreement. - [ ] It is set by local property valuation authorities. - [ ] It is determined at the end of the lease based on market value. - [ ] It fluctuates monthly based on rental payment patterns. > **Explanation:** The purchase price is negotiated and agreed upon by both parties before the lease begins to ensure price predictability. ### Why might a tenant choose a Fixed-Price Lease-Purchase Option? - [ ] To immediately gain ownership of the property. - [x] To have the option to purchase at a set price while working on finances or evaluating the suitability of the property. - [ ] To reduce monthly rental costs. - [ ] To avoid paying an upfront purchase price. > **Explanation:** This option allows tenants to secure the potential future purchase of a property at a set price while they assess their financial situation or the suitability of the home. ### What happens if the tenant does not exercise the purchase option by the end of the term? - [ ] The landlord must sell to another buyer immediately. - [ ] The tenant is penalized financially. - [ ] The tenant automatically gets a new fixed-price lease-purchase option. - [x] The tenant continues to lease or vacates as per lease terms without obligation to purchase. > **Explanation:** If the tenant does not exercise the option, they typically continue to lease the property under the existing terms or vacate without any further obligation. ### When can a tenant purchase the property in a Fixed-Price Lease-Purchase Option? - [ ] Only at the end of the lease term. - [ ] Any time after the first month. - [x] At any point during the lease term, subject to lease terms. - [ ] Only after re-negotiating the lease terms. > **Explanation:** The tenant can typically exercise the purchase option at any time during the predetermined lease period, as specified in the agreement. ### How does market appreciation impact a Fixed-Price Lease-Purchase Option? - [ ] It doesn’t since the purchase price is predetermined. - [x] It could benefit the tenant if property values increase. - [ ] It depends on re-evaluations of the property. - [ ] Only cumulative rental payments affect it. > **Explanation:** Market appreciation doesn't alter the predetermined price, potentially benefiting the tenant if property values rise. ### What is a landlord's advantage in offering a Fixed-Price Lease-Purchase Option? - [ ] Avoiding property management duties. - [x] Securing long-term tenants and potential future buyers. - [ ] Higher initial purchase prices. - [ ] Guaranteed property appreciation. > **Explanation:** Landlords can attract tenants interested in buying, securing reliable rental income and potentially closing a future sale. ### For what type of property can you use a Fixed-Price Lease-Purchase Option? - [ ] Only residential properties - [ ] Only commercial properties - [x] Both residential and commercial properties - [ ] Only vacant land > **Explanation:** This option can be applied to residential, commercial, and even certain industrial and multi-use properties. ### Does a Fixed-Price Lease-Purchase Option agreement require a down payment? - [ ] Yes, for all types of properties. - [ ] No, down payments are not standard for any lease. - [x] Sometimes an option fee is required, acting as a commitment indicator. - [ ] Only after the lease term ends. > **Explanation:** An option fee may be required to show the tenant's commitment to potentially purchasing and is usually a one-time, non-refundable fee. ### Can terms of a Fixed-Price Lease-Purchase Option be altered during the lease? - [ ] Yes, terms can be renegotiated monthly. - [ ] Only at the tenant's request. - [x] Typically, terms are fixed to provide certainty unless both parties agree to modifications. - [ ] No, terms cannot be changed once established. > **Explanation:** Terms are usually fixed to provide predictability; however, any changes would require mutual agreement between the parties.