Lease option sales were popular financing instruments in the late 1970s and early 1980s in America and Australia and are now becoming very popular in the UK.
They were primarily used as a way to circumvent alienation clauses in mortgages. Proponents claimed the sale was not really a sale because it was a lease; however, courts argued otherwise.
Today, options to purchase, lease options and lease purchase agreements are three different financing documents. The variances are state specific and not all states have identical laws. Before entering into an agreement with a seller, buyers should obtain the advice of a property lawyer.
The video below gives a brief outline