A Lease Option allows you to rent and occupy the home while having a contract to purchase the property for a set amount at a predetermined time in the future. There are two documents involved a lease or rental agreement, and a purchase contract to buy the property at a later date. Lease purchase agreements vary from transaction to transaction, so there is not one universally standard contract.
However, with many Lease Options you have the right to purchase the property by a certain date, but are not obligated to do so. Most often, options money is non refundable in the event you do not purchase the property. With a lease purchase, you skip paying closing costs, traditional down payment and other fees normally found in a purchase using conventional mortgages.
While you are leasing, you have no taxes or property insurance to pay the owner does that. Major repairs are normally the owner's responsibility until you buy the house, at which time YOU become the owner!