A lease-option agreement is in fact two documents.

The first document, the lease, is usually a standard residential tenancy contract most property managers use in Real Estate agencies.

The other document, which is known as an option to purchase, is a piece of paper that states the owner of the property has given the option holder (usually the leasee / tenant) the right to buy the property for a specific price within a set period of time.

Variations of this theme include such things as rental

credits, which are basically a amounts above the agreed periodical rental payments that will be credited towards the purchase price.

Another feature may indicate the rent will vary according to bank interest rates to make the payments equivelent to a loan payment.

The thing to note about lease-options is the option to purchase will expire after a set period of time if not excuted beforehand. In such cases the option fee, and possibly some or all of the rental credit may be forfieted by the purchaser.