A contract is a legally binding agreement that two or more parties sign, thereby obligating them to conditions that they have agreed upon. A contract between two parties is called a "bilateral" agreement; one between three parties is called a "trilateral" agreement; one between more than three parties is called a "multilateral" agreement.
In real estate context, a lease is a contract between a landlord (lessor) and a tenant (lessee) stating that the tenant can use the landlord's property for a certain amount of time and for a certain amount of money (rent).
Binding implies that the parties who are involved in a contract create mutual obligations; these obligations are enforceable.
A deed is a written instrument that conveys title to real property. A deed can be put in trust, which essentially means that it is given to a third party to keep until certain requirements are fulfilled.
Title is the lawful ownership of property. There are different types of ownership of property
A Purchase and Sale Agreement is the contract used between a seller and a buyer in the transaction of selling and buying a property. This is a bi-lateral contract where both parties are committed to one another.
Equity is the amount that someone actually owns. It is the difference between the value of the property and the loans still owing on it. It is also referred to as owner's interest.
A sublease is when someone who is already leasing a property from an owner leases it again to a third party for either a shorter term or the full term of the original lease, or leases only part of the property for a shorter or full term than the original lease.
Assignment refers to the transferring over of rights and/or ownership to a third party, much in the same way subleasing does.
An option means a choice or a selection. In real estate terms, an option is a written contract by one party to convey a right to buy, sell or use real property.
A lease option is a contract whereby the lessor/seller agrees that in return for a non-refundable deposit, the lessee/buyer has the option of buying the property at the end of the lease period.
Lease options came about when prices of houses were very high, and when the cost of borrowing money was very high as well. Buyers, therefore, could not afford to purchase a property or even to borrow money to purchase a property, and if they did they ended up paying very high interest rates. Enter lease options.
A rent-to-own is a bilateral agreement where the owner/landlord must sell the property and the buyer/tenant must purchase it at the end of the rental agreement. In a lease option, the owner/seller must sell only if the buyer/tenant decides to exercise the option and buy the property.
If you're in a situation where you've tried to apply for a mortgage and have been refused or are given an option to take a mortgage with a very high interest rate, then lease options may be a great vehicle for you to repair your credit and save for a down payment, so when it comes time to re-apply for a mortgage, you're in a better situation. Our services at Canadian Homeownership bring together homeowners, investors and people like you who want properties. We provide the forum for people to meet and work together to create win-win situations. We can facilitate transactions as well, providing our assistance and the assistance of our affiliates to help in various situations.
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