What is true about a lease option arrangement?

In a lease option arrangement, the key characteristic is that the tenant holds the option to purchase the property at the end of the lease term, but they are not required to do so. This means that the tenant has the right to buy the property but can choose not to, which provides flexibility for the tenant. The option typically involves a specified period during which the tenant can decide to exercise this purchase option, often stipulated in the lease agreement.

This structure allows tenants to live in the property and potentially accumulate funds for a down payment while having the security of knowing they can buy the property later. It's crucial that while the tenant has this option, they are not forced to make the purchase, which differentiates lease options from other arrangements where purchasing may be mandatory.

The other statements mischaracterize the nature of lease options. The tenant's lack of obligation to buy clearly defines the arrangement and differentiates it from a sale contract or other types of leases, hence making it essential to understand this flexibility when considering lease options. Additionally, there is no standard requirement for the duration of the lease option; it can vary significantly based on the agreement between the parties involved.