Tenant’s Option Agreement for Purchase of Real Property (Use when investor is selling)
THIS OPTION AGREEMENT ("Agreement") made and entered into this ________ day of
______________, 20_________, by and between _____________________, whose principal address is
___________________________, hereinafter referred to as "Optionor" and ______________________, whose
principal address is _______________________, hereinafter referred to as "Optionee":
WHEREAS, the Optionee shall have an Option to purchase certain real property owned/equitablyowned/undercontract/option by Optionor being, lying and situated in the County of ________________, State of ________________________, such real property having the street address of ______________________________ ("Premises") and such property being more particularly described as follows:
(Insert Legal Description)
and,
WHEREAS, Optionee desires to procure an option to purchase the Option Price is $______________.
The terms of purchase will be: _______________________________________________________________
_______________________________________________________________________________________
The follow items will be prorated at closing:_____________________________________________________
________________________________________________________________________________________
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged by the parties hereto and for the mutual covenants contained herein, Optionor and Optionee hereby agree as follows:
1. CONSIDERATION. Optionee has paid the sum of $___________________ as non-refundable option consideration which will be applied toward the purchase price of the property if, and only if, Optionee exercises this Option to purchase. In the even Optionee fails to exercise the Option or defaults under any terms of the attached lease, the Option will be void and all monies will be retained by Optionor as liquidated damages and not as a penalty.
2. GRANT OF OPTION. For and in consideration of the Option Fee payable to Optionor as set forth herein, Optionor does hereby grant to Optionee the exclusive right and Option to purchase the premises upon the terms and conditions as set forth herein.
3. NOT ASSIGNABLE. This option, or any interest therein, is not transferable or assignable and can only be exercised by the individuals signing this Option acting in unison for Optionee’s principal residence.
4. EXERCISE OF OPTION. Notice must be delivered to the Optionor in writing of the Optionee’s intention to exercise the Option at least sixty (60) says prior to exercise.
5. FAILURE TO EXERCISE. In the event the Optionee does not exercise its exclusive right to purchase the Premises granted by the Option during the Option Term, Optionor shall be entitled to retain the Option Fee, and this agreement shall become absolutely null and void and neither party hereto shall have any other liability, obligation or duty hereinunder or pursuant to this Agreement.
6. RECORDING. The recording of this Option or any memorandum thereof will result in the automatic revocation of the Option, and all monies will be retained by Optionor as liquidated damages and not as a penalty, Furthermore, Optionee will be liable to Optionor for all incidental and consequential damages for slander of title, including, but not limited to , attorneys fees and courts costs for correcting title.
7. MISCELLANEOUS.
(a) Execution by Both Parties. This Agreement shall not become effective and binding until fully executed by both Optionee and Optionor.
(b) Fee Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of _________________.
(c) Successors and Assigns. This Agreement shall apply to, inure to the benefit of and be binding upon and enforceable against the parties hereto and their respective heirs, successors, and or assigns, to the extent as if specified at length throughout this Agreement.
(d) Time. Time is of the essence of this Agreement.
(e) Headings. The headings inserted at the beginning of each paragraph and/or subparagraph are for convenience of reference only and shall not limit or otherwise affect or be used in the construction of any terms or provisions hereof.
(f) Entire Agreement. This Agreement contains all of the terms, promises, covenants, conditions and representations made or entered into by or between Optionor and Optionee and supersedes all prior discussions and agreements whether written or oral between Optionor and Optionee with respect to the Option and all other matters contained herein and constitutes the sole and entire agreement between Optionor and Optionee with respect thereto. This Agreement may not be modified or amended unless such amendment is set forth in writing and executed by both Optionor and Optionee with the formalities hereof.
8. DEFAULT. If the Optionee is in possession of the Premises under a valid lease agreement at the time of exercise of this Option, $____________ of each monthly payment received on or before the 1st of the month under said lease will be applied as additional Option Consideration to reduce the purchase price if, and only if, Tenant/Optionee exercises this Option to purchase. No portion of rent payments received after the 1st of the month will be applied to purchase price. All covenants of said lease agreement must have been faithfully performed in order for this Option to be valid and enforceable, including, but not limited to, the repairs, maintenance and upkeep of said leased Premises. In the event that the Optionee substantially defaults on any payments or other obligations required under said lease, this purchase Option will be automatically void and any moneys paid hereunder for rent or as Option Consideration will be retained by Optionor as liquidated damages and not as a penalty. A “substantial default” includes, but is not limited to, failure to make any lease payment by the 15th of any month for which rent is due.
9. NOT CONTINGENT. This Purchase Option is not contingent upon Optionee’s ability to obtain financing from a lender or any other reason. Optionee acknowledges that this agreement is not an installment land contract, contract-for-deed or equitable mortgage. This agreement is limited to the Optionee’s right to purchase the Premises under the terms stated above.
________________________________ _______________________________
OPTIONEE OPTIONEE
_______________________________ ________________________________
OPTIONOR DATE This document and accompanying materials are designed to provide authoritative information in regard to the subject matter covered in it. It is for illustration purposes only and presented with the understanding that the author and publisher are not engaged in rendering legal, accounting or other professional opinions. If legal advice or other expert assistance is required, the services of a competent professional should be sought. |
