Rent-to-Own Agreement Template – California

Rent-to-Own Agreement

This Rent-to-Own Agreement ("Agreement") is entered into on [Effective Date], by and between:

Seller/Landlord: [Full Legal Name], residing at [Address]
and
Buyer/Tenant: [Full Legal Name], residing at [Address]

Property Address: [Full Street Address, City, State, Zip]

1. Term of Agreement

The Term begins on [Start Date] and ends on [End Date], unless terminated earlier under this Agreement. Provided the Buyer/Tenant has complied with all provisions and is not in default, an option to purchase may be exercised as described below. The Parties agree to schedule a mid‑term check‑in on or around [Date] to confirm credits and compliance.

2. Rent, Credits, and Option Consideration

Monthly rent is $[Rent Amount], due on the [Day] of each month via [Method]. Of each rent payment, $[Credit Amount] shall accrue as a non‑refundable rent credit toward the purchase price upon successful closing; if no closing occurs, rent credits do not convert to cash unless expressly stated. In addition, an upfront option fee of $[Option Fee] (☐ refundable ☐ non‑refundable) is paid on execution and, unless prohibited, will be applied to the purchase price at closing.

3. Purchase Price and Exercise of Option

The agreed purchase price is $[Price] (☐ fixed ☐ appraised value formula: [Describe]). Buyer/Tenant must deliver written Notice of Exercise no later than [Notice Deadline] and close on or before [Closing Deadline], subject to financing and other contingencies stated herein. Failure to timely exercise or close, absent Seller/Landlord default, may result in forfeiture of option rights and accrued credits.

4. Property Condition; Inspections & Disclosures

Buyer/Tenant may obtain inspections within [Inspection Period] days of execution and periodically with reasonable notice. Seller/Landlord will provide available disclosures and known material facts; Buyer/Tenant accepts day‑to‑day maintenance obligations as described below. If inspection reveals issues exceeding $[Threshold], the Parties will confer in good faith to repair, credit, or terminate with terms stated here: [Remedy].

5. Maintenance and Repairs

Buyer/Tenant will handle routine upkeep (e.g., filters, landscaping, minor plumbing/electrical) up to $[Minor Cap] per occurrence. Seller/Landlord remains responsible for major systems and structural components unless damage is caused by misuse or neglect. All work must be performed by qualified personnel with receipts shared upon request.

6. Taxes, Insurance, and Utilities

Unless otherwise agreed, Seller/Landlord continues to pay property taxes and homeowners insurance during the lease portion; Buyer/Tenant maintains renters insurance naming Seller/Landlord as additional interest. Utilities and services are paid by ☐ Buyer/Tenant ☐ Seller/Landlord as follows: [Allocation]. If the property is part of an HOA, Buyer/Tenant agrees to comply with applicable rules; dues are paid by ☐ Seller/Landlord ☐ Buyer/Tenant.

7. Financing and Closing

Buyer/Tenant is solely responsible for obtaining financing; Seller/Landlord agrees to cooperate with customary lender requests (estoppel, access for appraisal). At closing, rent credits and the option fee (if applicable) will be applied to the purchase price, and title shall transfer by [Deed Type] free of undisclosed liens. Closing costs are allocated as follows: Buyer/Tenant: [List]; Seller/Landlord: [List].

8. Default and Remedies

Failure to pay rent when due, maintain required insurance, or abide by material provisions constitutes default. Upon Buyer/Tenant default, Seller/Landlord may terminate the lease, recover possession, and retain the option fee and any non‑refundable credits as liquidated damages where permitted by law. Seller/Landlord default entitles Buyer/Tenant to remedies including cure, credit preservation, or return of the option fee and unused credits.

9. Early Termination; Relocation Events

If Buyer/Tenant must relocate for employment or hardship, Parties may negotiate an early termination plan including a partial credit carry‑forward or a substitute buyer arrangement. Any subletting or assignment requires prior written consent. All keys and access devices shall be returned upon surrender.

10. Governing Law; Entire Agreement; Notices

This Agreement is governed by the laws of [State]; it constitutes the entire understanding of the Parties. Amendments must be in writing and signed by both Parties; notices shall be delivered per Section [Notices]. Headings are for convenience and do not affect interpretation.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

Seller/Landlord:
[Printed Name]
Signature: ______________________________
Date: ______________________________

Buyer/Tenant:
[Printed Name]
Signature: ______________________________
Date: ______________________________