What is exercising the option?
Exercising the option is the formal step where a lease option buyer notifies the seller, in the manner and within the time set out in the contract, that they intend to purchase the home at the agreed price. Once validly exercised, the option generally obligates both sides to move toward closing.
In a lease option agreement, the tenant pays an upfront option fee and usually a monthly premium on top of rent. That payment buys the right, but not the obligation, to buy the home later at a price set in the contract. Exercising the option is the act of using that right. The buyer tells the seller, in writing and in the way the contract requires, that they intend to purchase.
The notice matters because it is the point where a possibility becomes a commitment. Most Ontario lease option contracts set a deadline for this notice, often tied to the end of the lease term, and a missed or defective notice can mean the option lapses. The option fee and any premium credits the buyer has paid are typically handled according to the terms the parties signed, so the wording and timing of the contract deserve close reading before anyone sends a letter.
Once the option is properly exercised, the seller is generally bound to sell and the buyer is bound to close on the agreed price. Some buyers arrange mortgage financing or a second appraisal during the lease period so they can meet that closing date. If you are comparing providers, the lease option home listings in this directory are a starting point for finding sellers who use these contracts.
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