Great stuff as always Simon, thank you. Question: Should the PLO have the land registry reference number on it as well as the full details of address and owner.?
Simon. When you come to actually buy the property, and have your finance in place, do you then go for exchange and maybe 28 days later, for completion, or do it another way, say all at once.?
Maybe they get a price for the property that is more than they can currently get. With the lease payments, they do not have to worry about voids. Imagine that I want to sell my apartment in Central London for £1m, but nobody is taking it off my hands because interest rates are too high. I could wait until they fall, sure, but how long would that be and then I have to find a tenant to occupy the property until such time, though this may interfere with viewings or the time may be eventually right, but the tenant is still in the middle of the contract or is refusing to leave! So, with a PLO, I can agree the price that I want AND get lease rental payments whilst we wait. What is the worst that can happen, realistically? I get the property back after some months or years of rental receipts. Where is the seller going to live? Anywhere that they want! Perhaps they are moving to a job abroad where accommodation comes with the job, as is common with moves to the Middle East. As for paying tax...that is what landlords do all the time! Nothing bizarre here. What are they winning? A sale price that may not be achievable easily now AND rental payments toboot!
Really helpful, thank you. Just a question. I’m looking to do a lease option agreement, but I am concerned that I might not be able to purchase the property in five years time. Can I instead sell it at a higher price, and give the amount to the owner that has been agreed, and keep the difference?
Why would a seller give a lease option the seller would have to be very desperate to do this or it would have to be a buyers market. If its a sellers market there is no need for the seller to do a lease option.
Hi, Thank you for the question! A Seller could have many reasons to give a lease option. One reason is tax benefits, depending on the seller's financial situation, a lease option can provide certain tax advantages compared to an outright sale.
No owner in their right mind would do this its creates a restriction on the owners property title deeds. If they lessee pays 000s as the option fee then maybe, this commits the option to more to be exercised than not I do not take less than 10% of the value of the property either todays or the future price.
Maybe the amount offered is more than the current market value and the owner is in no great need of the money and/or the lease payments are generous enough to be tempting.
