California Real Estate Practice Exam

In a lease option, what can a portion of the rent be applied to?

1. Future rent

2. Purchase price

3. Maintenance fees

4. Lease extension fees

The correct answer is: Purchase price

In a lease option, a portion of the rent can be applied to the purchase price of the property. This arrangement allows tenants not only to lease the property but also to have the option to purchase it at a later date. The amount designated from the monthly rent towards the purchase price can serve as a sort of credit that contributes to the total price if the tenant exercises the option to buy. This aspect makes lease options appealing for potential buyers who may need time to secure financing or improve their creditworthiness while living in the property. The other choices, while they may represent legitimate expenses or considerations in a leasing context, do not specifically relate to the core structure and purpose of a lease option. Future rent payments typically do not involve applying any part toward a purchase or financial commitment beyond rent. Maintenance fees and lease extension fees are also separate costs associated with occupancy or prolonging the lease and do not have a relationship with the purchase price in the context of a lease option.