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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Transactions

Date & Time
  • event Date

    Wednesday, December 18, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00
CLE
ALL

This CLE webinar will discuss key terms and drafting considerations for lease-to-own agreements and how these differ from traditional commercial leases. The panel will address under what circumstances these agreements should be considered and what risks and benefits they have for owners and tenant/buyers.

Faculty

Adriana M. Peters
Member
CFG Law

Ms. Peters has more than 20 years of in-house and private experience directing legal efforts with regard to real estate development, construction and finance – and is a trusted advisor to local, regional and national landlords and tenants on commercial leasing matters spanning all asset types. Ms. Peters joined the firm from Lightstone Group, one of the largest, privately-held real estate management and development companies in the country with a commercial real estate portfolio of over 6 million square feet. As Lightstone’s General Counsel, she was deeply involved with commercial leasing and various transactions across the company’s portfolio – overseeing the legal components of the company’s acquisition, development, disposition, financing and land use functions on a national scale.

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Jeffrey M. Gussoff
Member, Real Estate Practice Group Leader
Chiesa Shahinian & Giantomasi PC

Mr. Gussoff’s practice consists of a broad spectrum of real estate matters, including representation of lenders in commercial real estate mortgage and construction loans; all types of industrial, commercial and retail leasing; the acquisition, financing and development of commercial and multiuse properties; and the real estate aspects of complex corporate transactions. His national practice includes the representation of institutional and private investors, lenders, public and closely held companies, developers, landlords and tenants.

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Description

In a volatile commercial real estate market, where purchasing commercial real estate may be financially out of reach for many businesses, commercial lease-to-own transactions provide an alternative with certain benefits and risks for owners and tenant/buyers.

Two common types of commercial lease-to-own agreements are lease purchase and lease option agreements. A lease purchase agreement is used when the tenant agrees to rent the property for an agreed-upon period and to purchase the property by a certain time. Whereas the lease option agreement gives the tenant the right to purchase the property during a defined period of the lease although they are not obligated to do so.

Lease-to-own agreements have unique considerations for owners and tenant/buyers such as the terms under which the tenant/buyer has the right to purchase the property including when the purchase must be made (or in the case of an option, when the option must be exercised); how much of the rent will be credited toward the eventual purchase price; and who is responsible for maintenance and repairs (which may differ from a traditional lease in that the tenant/buyer has an interest in the ongoing condition of the building they will be purchasing and, therefore, may take on more responsibility for maintenance/improvements). How certain terms are defined may also have tax implications for the parties.

Listen as our expert panel discusses the benefits and risks of lease-to-own agreements for owners and tenant/buyers and addresses key terms and drafting considerations.

Outline

  1. Introduction
    1. What is a commercial lease-to-own agreement?
    2. Pre-drafting considerations
  2. Lease purchase vs. lease option agreements
    1. Key differences
    2. Key terms and how they differ from traditional commercial lease terms
    3. Owner benefits and risks
    4. Tenant/buyer benefits and risks
    5. Possible tax implications
    6. State law considerations
  3. Practitioner takeaways

Benefits

The panel will review these and other key considerations:

  • Under what circumstances may counsel steer their clients toward a lease-to-own transaction?
  • What benefits and risks does a lease-to-own transaction have for owners? For tenant/buyers?
  • What key terms are unique to lease-to-own agreements and how do these differ from traditional commercial leases?