California Real Estate Practice Exam

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What does a lease option for a house provide to the tenant?

  1. The right to sublet the house

  2. The obligation to purchase the house in the future

  3. The right of possession and the right to purchase the house in the future

  4. The right to terminate the lease early without penalty

The correct answer is: The right of possession and the right to purchase the house in the future

A lease option provides the tenant with the right of possession of a house and the option to purchase the house in the future, typically at a predetermined price. This means that the tenant has the opportunity to live in the house and potentially become the owner in the future, but is not obligated to do so. Option A is incorrect because a lease option does not give the tenant the right to sublet the house, only the right to live in it themselves. Option B is incorrect because a lease option is not an obligation to purchase; it is an option. Option D is incorrect because a lease option does not allow the tenant to terminate the lease early without penalty, unless that is specifically stated in the lease agreement.

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