Lease with purchase option according to legislation

After all, buying a house or apartment is expensive and getting more and more expensive. Did you know that you can also rent properties with guaranteed purchase promise? This is called: renting with purchase option. What does it entail? What does the legislation say? What are the advantages and disadvantages? Read it here.

1. What is renting with purchase option?

Please note: Renting with purchase option is only valid on the Flemish housing market. Besides buying and renting a home, ‘renting with option to buy’ is also a possibility in Flanders. This is also called ‘rent-to-buy’.

• You rent the property for an agreed number of years (most common perdiode: 8-10 years). You enter into a standard residential rental agreement with your landlord for this period.
• After the rental period expires, you are given the option to buy the property at a pre-agreed price. You don’t necessarily have to buy the property.
• The landlord usually reduces the agreed purchase price of the property by a portion of the rent already paid.
• If you decide to buy the property after the expired period, you and the landlord draw up a purchase agreement. After signing, you officially own the property.

2. The legislation surrounding renting with option to buy

As mentioned earlier, renting with purchase option is only valid on the Flemish housing market. Here, the Flemish Housing Rent Decree applies. This contract is subject to the same rules as a standard rental contract. The landlord must register the lease and draw up a location description. Be sure to include these 3 things in your rental contract:

• Monthly rent.
• The purchase price of the property.
• The length of the rental period.

Get advice from your notary regarding the specific conditions of renting with an option to purchase.

3. Benefits

• You get to know the residence and the neighborhood.
• You are under no obligation to purchase the property.
• You should not move after the end of the lease.
• You may use (part of) your rental money as an advance on the purchase price.
• Meanwhile, you are saving capital for your house or apartment while already living in it.
• You invest in the property you are likely to purchase later. So you are already buying furniture and furnishing it the way you want.
• You buy the property at the pre-agreed purchase price. This price does not increase with market prices and inflation. Beware of hidden costs, though.

4. Cons

• Your monthly rent may be higher than the property’s standard rent.
• You will lose the portion of (potential) surcharge you pay on your rent if you choose not to purchase the property.
• You should quickly arrange a mortgage at the end of the rental period if you choose to buy the property.

Sources: Dewaele, Flanders

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