Lease With Option

Sugar workers get leases

Former Minister of Agriculture and Fisheries Dr Christopher Tufton last Friday presented more than 40 employees of Frome Sugar Estate, Westmoreland, with lease agreements.

The lease agreements, handed out at the factory, are part of the Government's objective to assist displaced sugar workers and their dependents who qualify under the Sugar Company of Jamaica Holdings Limited Housing Project, following the divestment of its sugar investments.

The housing project is aimed at regularising the occupation of houses and lands owned by the Government at Frome, Monymusk and Bernard Lodge, by giving the occupants an opportunity to lease land with an option to purchase.

Tufton said that the occasion was significant, as the programme would finally address the relocation of residents of sugar barracks into decent housing.

Problematic backgrounds

He said that the Government was sensitive to the realities of what transpired in the sugar industry in the past, when many persons who worked in the industry occupied land, property and social amenities that they did not have to pay for, as part of their employment contract.

"The Government believes it has an obligation, in changing that paradigm to a more viable industry, to working to help those persons who benefited from the industry, to transition themselves in a context that does not bring them undue levels of hardship that would make it difficult for them to survive," Dr Tufton noted.

He said that over 2,000 householders from the three former government-owned estates, Monymusk, Bernard Lodge and Frome, would be relocated.

Tufton said the Government is addressing the social issues, through the Sugar Transformation Programme. Some $900 million is programmed to be spent this financial year, to provide immediate relief to about 5,000 vulnerable sugar workers and small cane farmers.

The transformation programme will also address the relocation of residents of sugar barracks to decent housing. Some $500 million is be spent over the next two years to benefit over 300 households, or 1,200 persons, the former minister said.

What are the exit strategies for Lease Option Buyers? « UK ...

We have already discussed the various exit strategies of the traditional buy-to-let and cash purchases and most would agree they are good strategies but limited by their very nature of strategy. However, with the lease option strategy,  a whole new exciting way of looking at exit strategies starts to emerge!

For a start, the buyers are in a different category to the normal investor i.e. they are actually ‘renting to own’. At no time are they ever under any pressure to purchase, except from their own personal commitment to actually purchase the house.

Secondly, the Buyer chooses not to purchase after their lease option is over, they can simply walk away. Or they can stay on as tenants if it this is agreeable to the seller. Or they can ask for an extension. In this case, the seller may choose to re-negotiate some or all of the terms such as sales price, length of lease option, and amount of option payments credited towards the purchase. The seller may choose to collect another lump sum option fee and different instalment option fees that may be applied to the sales price of the property.

Therefore, this is what can happen:-

1) If the Buyer chooses to exercise their option; they will apply their option fee(s) paid to date towards the purchase price. They will get a mortgage from a bank, building society or other lender. When a buyer exercises their option, the seller keeps the option fee(s), the rent, along with their back-end profit

2) If they are unable to get a mortgage or the mortgage of their choice, the seller may consider offering them another lease option agreement on re-negotiated terms.

3) If a buyer chooses not to exercise their option, the seller keeps their option fee and the rent. They would not collect their back-end profit, but they can re-market the property and sell it again on a lease option.

So you can see why Lease Options is the most viable property strategy in the market today and actually has the most flexible and practical exit strategy of them all! Next time, we will look at why this is relevant to cashflow and profitability in helping everyone achieve a win-win situation.

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