Question 1

What is an option to purchase in a Florida lease?

Accepted Answer

A lease option to purchase gives the tenant the right to buy the leased property at a predetermined price during or at the end of the lease term. In Florida commercial leases: the option is typically negotiated at the time of lease execution, the exercise price may be: fixed (set at lease signing), based on fair market value at the time of exercise, or based on a formula (such as a percentage above the original purchase price). The option must be exercised in strict compliance with the lease terms (Florida courts strictly construe option provisions).

Question 2

What provisions should a Florida lease option to purchase include?

Accepted Answer

Key provisions: exercise price (fixed, FMV, or formula), exercise period (when the option can be exercised: during the lease term, within a specific window, or only at lease expiration), exercise procedure (written notice requirements, deposit, and closing timeline), financing contingency (whether the tenant can cancel if financing is not obtained), property condition (seller/landlord representations about the property at closing), and rent credit (whether any portion of rent paid during the lease is credited toward the purchase price).

Question 3

How does a lease option affect the landlord’s ability to sell?

Accepted Answer

Landlord impact: during the option period, the landlord cannot sell to a third party (the option gives the tenant priority). If the landlord sells: the option typically runs with the land (binding on the new owner), the new owner must honor the tenant’s option, and the tenant should record a memorandum of the option to ensure the new owner has constructive notice. The option reduces the property’s marketability because: potential buyers know the tenant may exercise, and the exercise price may be below market value.

Option to Purchase Lease Provision

Option to Purchase in Florida Leases

Key Provisions

Strict Compliance

Landlord Impact

Related Terms

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