Michigan Lease to Own Agreement
A Michigan Lease-to-Own Agreement, also known as a “rent-to-own” or “lease option”, is a rental form used for leasing property to tenants, while also giving them the option of purchasing the property at the end of the lease term.
The contract begins as a standard lease, forming a landlord-tenant relationship in compliance with all of Michigan’s lease laws. However, near the end of the lease term, the tenant(s) will be given a window of time in which they can purchase the property if they so choose.
- Lease Laws: Chapter 554
Should the tenants wish to purchase, the landlord and tenant(s) will enter into a purchase agreement, after which the transaction will be like any other real estate purchase. It is recommended that tenants head into the deal with the expectation that they will purchase the home, as each monthly payment is considerably more than the average rent. This is because a portion of each monthly payment builds to form a down payment, which is held onto by the landlord or another 3rd party. Should the tenant decide to not exercise their right to purchase, the accrued down payment is lost.