lease option
A lease option refers to a contractual arrangement in which a lessee leases real or personal property and receives the option to purchase the property at a later date, often at the end of the lease term. The option gives the lessee the right, but not the obligation, to buy the property under specified terms.
A lease option differs from a lease-purchase contract. In a lease option, the lessor is obligated to sell only if the lessee exercises the option, while the lessee is not required to complete the purchase. By contrast, a lease-purchase contract generally obligates both parties to complete the sale at the end of the lease term.
Lease options are often used in residential real estate transactions and certain equipment or vehicle leasing arrangements.
[Last reviewed in March of 2026 by the Wex Definitions Team]
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