What is the difference between a sale-leaseback and a lease with option to buy?

What is the difference between a sale-leaseback and a lease with option to buy?

• A. A sale-leaseback transfers ownership to the seller who then leases back from the buyer.
• B. A sale-leaseback gives the lessee the option to purchase at a later date.
• C. A sale-leaseback transfers ownership to the buyer who then leases back to the seller; a lease with option to buy gives the lessee the right, not the obligation, to purchase later.
• D. A lease with option to buy obligates the tenant to buy at a fixed price.

Answer: (C)

In a sale-leaseback the ownership of the property changes hands. The seller sells the property to a buyer and then leases it back from the new owner, so the buyer becomes the owner and the seller becomes the tenant who continues to use the property under a lease. This setup is about transferring ownership while continuing to occupy the space. In contrast, a lease with option to buy keeps ownership with the landlord unless the tenant exercises a separate option to purchase later. The tenant has the right, but not the obligation, to buy at an agreed price and terms in the future. So the best answer describes both parts: ownership transfers to the buyer who leases back to the seller; and the lease with option to buy gives the lessee a right, not a commitment, to purchase later. The other options mix or misstate these points—one incorrectly assigns ownership to the seller, and another treats the option-to-buy as an obligation.

In a sale-leaseback the ownership of the property changes hands. The seller sells the property to a buyer and then leases it back from the new owner, so the buyer becomes the owner and the seller becomes the tenant who continues to use the property under a lease. This setup is about transferring ownership while continuing to occupy the space.

In contrast, a lease with option to buy keeps ownership with the landlord unless the tenant exercises a separate option to purchase later. The tenant has the right, but not the obligation, to buy at an agreed price and terms in the future.

So the best answer describes both parts: ownership transfers to the buyer who leases back to the seller; and the lease with option to buy gives the lessee a right, not a commitment, to purchase later. The other options mix or misstate these points—one incorrectly assigns ownership to the seller, and another treats the option-to-buy as an obligation.