The Lease To Own Agreement is a specialized contract used in Malta when parties wish to combine a property lease with a future purchase option. This arrangement is particularly suitable for buyers who need time to arrange financing or build up equity through rental payments, while securing their right to purchase the property. The document must comply with Malta's Civil Code, the Private Residential Leases Act 2020, and the Promise of Sale Agreement Act, making it essential for transactions where a gradual transition from tenant to owner is desired. The agreement includes detailed provisions for rent payments, purchase price calculations, credit accumulation, property maintenance responsibilities, and the specific process for exercising the purchase option, all structured within the framework of Maltese property law.
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1. Parties: Identification of the Owner/Lessor and Tenant/Potential Buyer, including full legal names, ID numbers, and addresses
2. Background: Context of the agreement, including property details and parties' intentions regarding the lease-to-own arrangement
3. Definitions: Key terms used throughout the agreement, including 'Option Period', 'Purchase Price', 'Rent Credits', etc.
4. Property Description: Detailed description of the property including address, boundaries, and registration details as per Land Registry
5. Lease Terms: Duration of lease, monthly rent amount, payment terms, and allocation of rent credits toward purchase
6. Option to Purchase: Terms of the purchase option, including option period, exercise process, and purchase price calculation
7. Rent Credits: Calculation and application of rent credits toward the purchase price
8. Property Usage and Maintenance: Permitted use of property, maintenance responsibilities during lease period
9. Exercise of Option: Process and requirements for exercising the purchase option
10. Default and Termination: Consequences of default under either lease or purchase provisions
11. Taxes and Expenses: Allocation of taxes, stamp duties, and other expenses during lease and upon purchase
12. Governing Law: Confirmation of Maltese law application and jurisdiction
13. Execution: Signature blocks and witnessing requirements
1. Insurance Requirements: Detailed insurance obligations - include when property requires specific insurance coverage
2. Property Improvements: Rules regarding modifications to property - include when improvements are anticipated
3. Assignment and Subletting: Include when parties want to explicitly address transfer rights
4. Early Purchase Option: Include when allowing purchase before end of lease term
5. Mediation Clause: Include when parties prefer alternative dispute resolution
6. Property Management: Include for properties in multi-unit buildings or complexes
7. Utilities and Services: Include when specific arrangements for utilities need to be detailed
1. Schedule 1 - Property Details: Detailed property description, including plans and photographs
2. Schedule 2 - Rent Payment Schedule: Monthly rent amounts, due dates, and rent credit calculations
3. Schedule 3 - Inventory: List of furnishings and fittings included in the property
4. Schedule 4 - Condition Report: Initial condition of the property with photographs
5. Schedule 5 - Purchase Price Calculation: Formula and examples of final purchase price including rent credits
6. Appendix A - Required Notices: Mandatory notices required under Maltese law
7. Appendix B - Property Energy Performance Certificate: Current EPC as required by law
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