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Alabama Rent-to-Own (Lease Option) Agreement

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Updated on September 24th, 2021

An Alabama rent-to-own agreement is a form used by property owners to rent their real estate to tenants while giving them the option to purchase the property. The agreement effectively combines a lease agreement with a purchase agreement, allowing the parties to negotiate a rent amount, the term of the lease, the purchase price of the home, and all other rental/purchase conditions.

It’s important to understand that the tenant has the option to purchase the property, and they are not contractually obligated to do so. However, in most cases, the tenant will opt to commit to the purchase as they will likely have paid increased rent, an option fee, utilities, and maintenance. These investments will be lost at the end of the lease term if the purchase is not completed.

Rental Laws – Title 35, Chapter 9A (Alabama Uniform Residential Landlord and Tenant Act)

Purchase Agreement Laws – Title 6, Ch. 9, Art.5, Div. 3 (Conveyance)

Disclosures (2)

  1. Lead-Based Paint Disclosure
  2. Owner/Manager Identification

1) Lead-Based Paint Disclosure Form

If the rental unit was built before 1978, then this disclosure must be provided to all tenants.https://esign.com/wp-admin/media-upload.php?post_id=7092&type=image&TB_iframe=1

  • Download: PDF

2) Owner/Manager Identification

The name and address of the owner, property manager, and anyone who acts on behalf of the owner for the purpose of receiving demands and notices must be provided to the tenant.

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