Have you ever wondered the difference between a residential lease and a triple net lease with option to purchase? While every lease is different and before signing any legally binding document one should read over it carefully and/or consult a legal professional, here are some of the basic differences between a residential lease and a lease with option to purchase.

·   Typically, when it comes to a residential lease the owner/landlord is responsible for maintenance, repairs, and updates. Whereas when it comes to a triple net lease with option to purchase these responsibilities fall on the tenant/lessee.

·   Taxes and insurance are typically paid by the Lessor in both cases; however, on a triple net lease with option to purchase, the Lessee typically pays extra either monthly or when taxes and insurance are due to cover these costs.

·   When entering into a triple net lease with option to purchase contract, the Lessee is working toward ownership. Each month a portion of the amount paid to the Lessor goes toward interest and a portion toward the purchase price of the home. When entering into a residential lease, you are NOT working toward home ownership.

So, why do people choose a residential lease over a triple net lease with option to purchase? There are many reasons. Possibly the most common is maintenance on the home.

Why do people choose a triple net lease with option to purchase over a residential lease? Again with many reasons to choose from, possibly the most common reason is home ownership. For one reason or another the individual(s) are not ready to purchase at the time (this could be due to needing to raise their credit score, relocation/new job or numerous other reasons); however, they do not want to miss out on the home or they would like to have a head start in working down some of the purchase price.

Which one do you think is right for you?

P.S. Please remember that all leases are different and should be read carefully and fully. Do NOT be afraid to ask your Landlord questions regarding the lease (at the time of lease signing, OR before OR even after signing the lease). It is best that all parties are clear of expectations. When it comes to leases, don’t forget to have any/all special agreements detailed in writing. This is for everyone’s benefit!