It is rather a new concept for many people in Malaysia, although this concept has been widely used as a strategy to acquire properties in many other countries such as the United Kingdom, New Zealand, Australia etc.
Many people approached me and asked whether the concept of Lease Option could work in Malaysia. I would like to share the following views/ information on Lease Option in Malaysia.
What is Lease Option?
A Lease Option is a contract which consist of 2 fundamental elements:
1) Lease of the property: the owner leases the property
2) An Option: the owner grants the buyer the option to purchase the property at an agreed price which is exercisable within a specified period
Who are the parties to Lease Option?
1) Property owner (known as the Seller) who grants the lease and the option
2) Buyer who has been granted the option. He/she may be the tenant under the lease OR may sub-let the property to another tenant.
Why Lease Option?
This strategy allows the buyers/ property investors to take control of the property without having the need to apply for financing to purchase the property.
Would Lease Option work in Malaysia?
Why not?
As long as the parties enter into valid and binding Lease Option contracts, such strategy would work in Malaysia (like in any other countries mentioned above).
Is Lease Option common in Malaysia?
Personally, I do not think so.
What are the challenges?
As such concept is still not common in Malaysia, the buyers must have the knowledge and skills to convince the other parties to enter into Lease Option arrangements.
It would be interesting to observe how this concept would develop in Malaysia in next few years.
By: TEH TAI YONG 28-11-2011
Hi,
ReplyDeleteDo you specialized in lease option contracts?
Yes
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