Addendum S makes the purchase contract contingent upon the buyer and seller completing a separate, mutually agreeable lease-purchase or lease-option agreement within five days after the Effective Date.
The rider asks the parties to choose a lease purchase or lease option, then makes the purchase contract contingent upon executing a separate agreement with mutually acceptable terms within five days after the Effective Date.
That separate document must handle the actual landlord-tenant relationship, purchase or option mechanics, money, maintenance, default and possession. Addendum S does not fill those gaps simply because it is attached to the sales contract.
The title placed on the document matters less than the rights and duties written inside it.
A lease-purchase agreement generally contemplates that the tenant-buyer will rent first and complete the purchase later. Failure to close may create a contract default rather than merely allowing an opportunity to expire.
Core question: What happens if the buyer cannot or will not close?
A lease-option agreement generally gives the tenant-buyer the right to purchase during a defined option period without necessarily creating an absolute duty to exercise. The exact language controls whether the right is truly optional.
Core question: How, when and at what price must the option be exercised?
Addendum S answers a small number of contract questions with significant consequences.
The parties identify whether they intend a lease purchase or a lease option.
The substantive arrangement must be contained in another mutually agreeable written agreement.
The separate agreement must be executed within five days after the sales contract’s Effective Date.
The rider allocates drafting fees to buyer, seller or an equal split.
If no attorney-fee box is selected, buyer and seller divide the drafting fees equally.
If no timely agreement is executed, the purchase contract terminates and the deposit returns to the buyer.
The parties are simultaneously addressing a lease and a future purchase right or obligation. Waiting until after contract execution to discuss rent, possession, option money, repairs or default can make the five-day deadline unrealistic.
The agreement must be executed—not merely circulated, discussed or sent to an attorney—within the rider’s stated period. Calendar the deadline using the complete sales contract’s time-computation provision.
Best practice: Identify Florida counsel before signing the purchase contract and provide a written term sheet early enough for drafting, negotiation and signatures.
The buyer bears the attorney fee for preparing the separate agreement.
The seller bears the attorney fee for preparing the separate agreement.
Buyer and seller each pay one-half of the preparation fee.
The rider defaults to an equal split between buyer and seller.
A careful document coordinates landlord-tenant duties with the contemplated sale.
The agreement should identify each payment, its purpose, who holds it and what happens to it under every ending.
Secures lease performance and may be governed by Florida landlord-tenant requirements concerning holding, notice and return.
May purchase the exclusive right to buy for a defined period and may be nonrefundable depending on the agreement.
A negotiated portion of rent may be credited at closing, but the formula and conditions must be written clearly.
Earnest money under the sales contract has its own escrow and dispute provisions and should not be casually blended with lease funds.
Application, association, legal and inspection costs may be paid even if the future purchase never closes.
Money spent on a property the tenant does not yet own can be lost unless reimbursement or credit rights are specifically created.
A tenant-buyer may spend months paying premium rent and improving the home, then discover that credit, appraisal, title or financing prevents closing. Whether money is lost—and whether the buyer is in default—depends on the separate agreement.
The safest time to resolve those consequences is before possession begins.
Confirm the likely loan path, qualification obstacles and realistic preparation period.
State whether it is rent, deposit, option consideration or a conditional purchase credit.
Address repairs, casualty, insurance, major systems and improvements during occupancy.
Explain what happens if the option expires, financing fails, either party defaults or the property cannot close.
No. It requires the parties to execute a separate, mutually agreeable lease-purchase or lease-option agreement. That second document supplies the substantive rental and future-purchase terms.
A lease purchase generally anticipates an obligation to complete the purchase, while a lease option generally provides a right to purchase that the tenant-buyer may choose whether to exercise. The actual document language controls.
Addendum S provides five days after the sales contract’s Effective Date. The complete contract controls how that time is calculated.
The purchase contract terminates, the buyer’s deposit is refunded and the parties are released from further obligations under that purchase contract.
The rider allows the buyer, seller or both equally to pay. If no selection is made, the preparation fee is divided equally.
No. A rent credit exists only if the separate agreement creates one and explains its amount, conditions and treatment at closing.
Not automatically. The separate agreement should state whether option consideration is refundable, applicable to the price, forfeited when the option expires or treated differently under specific defaults.
A standard lease may not address the purchase or option relationship, competing defaults, credits, improvements and future closing. Florida counsel should prepare or review a coordinated agreement for the specific transaction.
DW&Co. can help coordinate the real estate contract, transaction timeline and the appropriate Florida legal, lending, title and insurance professionals.
Talk with DW&Co. Real Estate