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Master Lease With Option To Purchase Template for South Africa

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Key Requirements PROMPT example:

Master Lease With Option To Purchase

"I need a Master Lease with Option to Purchase agreement for a commercial warehouse property in Cape Town, South Africa, with a 3-year initial lease term starting March 2025 and an option to purchase that can be exercised after 18 months, with 30% of paid rent to be credited towards the purchase price."

Document background
The Master Lease with Option to Purchase agreement is a sophisticated legal instrument used in South African property transactions where parties wish to combine a standard lease arrangement with a future purchase opportunity. This document is particularly useful when a potential buyer wishes to occupy a property immediately but needs time before committing to a purchase, or when a property owner wants to secure a potential buyer while generating rental income. The agreement must comply with South African property law, including the Rental Housing Act and Alienation of Land Act, while providing comprehensive terms for both the lease period and the purchase option. It's commonly used in both commercial and residential contexts, offering flexibility to both parties while ensuring legal protection and clarity in the arrangement.
Suggested Sections

1. Parties: Identification of the Lessor/Seller and Lessee/Potential Purchaser with full legal details

2. Background: Context of the agreement, including property details and parties' intentions regarding lease and potential purchase

3. Definitions and Interpretation: Definitions of key terms and interpretation rules for the agreement

4. Property Description: Detailed description of the leased property, including physical address and legal description

5. Lease Terms: Core lease provisions including duration, rental amount, payment terms, and annual escalations

6. Option to Purchase: Terms of the purchase option, including purchase price, option period, and exercise procedures

7. Security Deposit: Details of security deposit requirements, handling, and conditions for return

8. Maintenance and Repairs: Responsibilities of each party regarding property maintenance and repairs

9. Insurance and Risk: Requirements for property insurance and allocation of risks

10. Utilities and Services: Responsibility for utilities, services, and related charges

11. Use of Property: Permitted uses of the property and any restrictions

12. Exercise of Purchase Option: Process and requirements for exercising the purchase option

13. Transfer of Property: Procedures and obligations regarding property transfer upon exercise of purchase option

14. Breach and Termination: Consequences of breach and termination provisions

15. Notices and Domicilia: Communication procedures and official addresses for notices

16. General Provisions: Standard legal provisions including entire agreement, variation, and governing law

Optional Sections

1. Rental Credit: Used when a portion of rental payments will be credited toward the purchase price

2. Property Management: Include when a property manager will be involved in managing the lease

3. Special Improvements: Used when specific improvements are permitted or required during the lease term

4. Sub-letting: Include when sub-letting is permitted under specific conditions

5. First Right of Refusal: Used when giving the tenant additional rights to purchase if the option expires

6. Financing Contingencies: Include when purchase option exercise is subject to financing conditions

7. Multiple Units: Used when the lease covers multiple units with different terms

8. Operating Expenses: Include for triple net leases where tenant pays operating expenses

Suggested Schedules

1. Schedule A - Property Description: Detailed legal description of the property including diagrams and plans

2. Schedule B - Rental Payment Schedule: Detailed breakdown of rental payments, escalations, and due dates

3. Schedule C - Purchase Price Calculation: Formula and terms for determining final purchase price including any rental credits

4. Schedule D - Property Condition Report: Detailed assessment of property condition at lease commencement

5. Schedule E - Maintenance Schedule: Detailed breakdown of maintenance responsibilities

6. Schedule F - Permitted Improvements: List of improvements tenant is permitted to make

7. Schedule G - Insurance Requirements: Detailed insurance requirements for both parties

8. Appendix 1 - Property Photos: Photographic record of property condition

9. Appendix 2 - Compliance Certificates: Copies of relevant compliance certificates

10. Appendix 3 - Rules and Regulations: Building or complex rules if applicable

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Real Estate

Commercial Property

Residential Property

Retail

Industrial

Agriculture

Hospitality

Office Space

Manufacturing

Logistics

Healthcare

Education

Relevant Teams

Legal

Real Estate

Finance

Operations

Facilities Management

Risk and Compliance

Property Management

Asset Management

Investment

Business Development

Acquisitions

Portfolio Management

Relevant Roles

Property Manager

Real Estate Attorney

Legal Counsel

Chief Financial Officer

Facilities Manager

Real Estate Agent

Property Developer

Asset Manager

Operations Director

Commercial Director

Leasing Manager

Property Portfolio Manager

Risk Manager

Compliance Officer

Investment Manager

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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