Posted by LeonNC on February 15, 2001 at 01:01:10:
Burke,
When you give a tenant/buyer a rent credit, the amount of the credit will be applied toward the purchase price charged to the buyer when they purchase the property.
For example: Say you rent a property to your tenant/buyer or tb for $500.00 with a $50.00 rent credit for two years. You gave them an option to purchase the house for $50,000. Upon the tenant exercising the option to purchase the total rent credit of ($50.00 x 24 months) $1200 would be subtracted from the amount the buyer owes you at closing. So, the tb would owe you $48,800 at closing minus any option consideration that applied.
I hope this helps
LeonNC