Posted by Jim Kennedy - Houston, TX on March 24, 2000 at 24:15:31:
Concerning the duration of the lease/option, it is best to reach an agreement with the seller during your initial negotiations. The duration of virtually ANY contract can always be extended later by mutual agreement of the parties involved, but it is generally easier and less risky to come to terms up front. By setting up a lease/option for a specific minimum period (i.e. one or two years) with renewable additional time periods (i.e. one year increments), you are only obligated for one year at a time. You can CHOOSE to exercise your option at any time during the term of the contract, but you are not OBLIGATED to do so.
?Does the seller have the right to say no to this??
Initially ? yes, later ? no. You and the seller would have to agree to the terms of the lease/option up front. And, yes, the seller can say no to any portion during negotiations. But once the parties execute the contract (sign on the dotted line), the parties must abide by the agreed upon terms.
?Is there a new contract that has to be negotiated yearly??
No, the original contract remains in force and its duration is simply extended by virtue of the terms originally negotiated between seller and buyer. Each year that the buyer chooses to extend the lease/option, he would simply notify the seller in writing to that effect.
BTW, I proposed a one-year initial term with the right to renew for eleven additional one-year terms because you indicated in your original post that the ?owner is considering seller financing for no more than twelve years??
Hope this helps.
Best of Success!!