Lease-To-Own

January 24, 2014  |     |     |   0 Comment

A lease-to-own arrangement is common in domain name and even real estate transactions. It involves a lessee (renter) making lease payments to a lessor (landlord) for the use of his domain name.

Included in this leasing agreement is a purchase option which allows the lessee to purchase the domain name from the lessor at a given price and time during the term of the lease. The parties can structure a fixed price purchase option or bargain price purchase option.

Because it is an option, the lessee can choose to allow it to expire without purchasing the domain name. The option may be offered to the lessee for free or there may a fee paid upfront or regularly to initiate or renew the option.

This is similar to a call option in stock investing.

Author: 

Kris Tabetando provides mergers & acquisitions (M&A) advisory and brokerage services to Internet companies. He also partners with investors to acquire & manage Internet businesses.

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