Maryland Home Improvement PSI Practice Exam

What type of lease arrangement allows for the tenant to purchase the property after a specified period?

1. Lease option.

2. Standard lease.

3. Month-to-month lease.

4. Sublease.

The correct answer is: Lease option.

A lease option is a type of lease arrangement that gives the tenant the right, but not the obligation, to purchase the property after a specified period. This arrangement typically includes terms that outline the duration of the lease and the price at which the tenant can purchase the property, allowing for a clear path to homeownership. This type of agreement can be beneficial for tenants who may need time to improve their financial situation or credit score before buying a home, or for those who want to "test drive" the property before committing to a purchase. The lease option often provides tenants with additional flexibility and security, as they can live in the property while also having the opportunity to buy it later on. In contrast, a standard lease does not offer any option for purchasing the property, a month-to-month lease provides flexibility in tenancy without any purchase rights, and a sublease involves renting out the leased property to another tenant, which does not relate to the option of purchasing the property itself.