An Alaska rent-to-own agreement (“lease-option”) is an agreement formed between an owner/landlord and a tenant that allows the tenant to lease a residential property with the added option that they can purchase the rental anytime during the lease. The agreement-type allows those with less-than-stellar credit to take steps towards owning a home, giving them a chance to improve their financial standing prior to making a purchase.
The property’s purchase price is negotiated at the start of the lease, which can work out in the benefit of either party depending on the state of the housing market when/if the buyer decides to purchase. During the lease, the tenant will have a portion of their rental payments directed towards the purchase price of the rental. Additionally, they will be required to pay an upfront fee known as the “option fee”. This fee gives the tenant the right to purchase the property at any time during the option term. The option term is a block of time that is set by the parties. While it is typically set as the same length of the lease, the parties can negotiate any option term they want.
Lease Laws – Title 34, Ch. 3, §§ 10-380
Purchase Agreement Disclosures – Title 34, Ch. 70, §§ 10-200