A lease-to-buy option, also known as a rent-to-own or lease-purchase agreement, is a contract that allows a tenant to rent a property with the option to purchase it at a later date. Here's how it typically works:

1. Agreement Terms: The landlord and tenant agree on the terms of the lease, including the monthly rent, the duration of the lease, and any additional terms specific to the lease-to-buy arrangement.

2. Option Fee: The tenant usually pays an upfront fee, called the option fee, to secure the right to purchase the property at a later date. This fee is often negotiable, but it is not refundable if the tenant decides not to exercise the purchase option.

3. Rent Payments: The tenant pays a monthly rent to the landlord, just like in a regular rental agreement. Some lease-to-buy agreements may specify that a portion of the monthly rent is applied towards the eventual purchase of the property. This is known as a rent credit.

4. Purchase Price: The lease agreement should specify the agreed-upon purchase price for the property. This is typically determined at the time the lease-to-buy agreement is signed and may be based on market value at that time or a pre-determined price.

5. Option Period: The lease will outline the duration of the lease and the specific time frame within which the tenant can exercise their option to buy the property. This is often a few years in the future, allowing the tenant time to prepare for the purchase.

6. Maintenance and Repairs: The responsibilities for maintenance and repairs should be clearly defined in the lease agreement. In some cases, the tenant may be responsible for certain repairs, while the landlord handles others.

7. Inspections and Appraisals: The lease may include provisions for inspections or appraisals of the property before the tenant exercises the purchase option. This helps ensure that the property is in the expected condition and that the purchase price is fair.

8. Financing: It's up to the tenant to secure financing when they decide to exercise the purchase option. This can be through a mortgage or other means, depending on the agreement.

9. Exercising the Option: When the option period expires, the tenant can choose to exercise their right to buy the property. They will need to notify the landlord in writing and provide any required documentation (such as proof of financing).

10. Closing the Sale: If the tenant decides to proceed with the purchase, they and the landlord will proceed with the closing process, which involves transferring ownership of the property.

It's important for both parties to carefully read and understand the terms of the lease-to-buy agreement, and it's often a good idea to consult with legal professionals to ensure that the contract is fair and legally binding. Keep in mind that specific terms can vary, so it's crucial to review the agreement in detail before entering into such an arrangement.