NEW: Moving Day: January 2026 Industry Hires And Promotions

Option To Purchase

Learn how an option to purchase works in Canadian real estate, when it’s used, and how it protects both parties in lease-to-own or commercial agreements.

Option To Purchase

May 22, 2025


What is an Option To Purchase?

An option to purchase is a clause in a contract that gives one party the exclusive right — but not the obligation — to buy a property within a specified time frame and at agreed-upon terms.

Why Option To Purchases Matter in Real Estate

In Canadian real estate, options to purchase are common in lease-to-own and commercial transactions. The buyer pays an option fee for the exclusive right to purchase the property in the future. This right is not transferable and typically expires if not exercised by a set date.

Option agreements typically include:
  • Purchase price or pricing formula
  • Duration of the option period
  • Non-refundable option fee
  • Terms under which the option can be exercised
These clauses benefit buyers who need time to secure financing or meet specific conditions, while sellers may use them to secure a potential sale while continuing to receive rental income. Legal review is crucial to ensure enforceability.
Understanding the option to purchase helps buyers structure flexible agreements and evaluate their rights before committing to full ownership.

Example of an Option To Purchase

A commercial tenant signs a five-year lease with an option to purchase the building at $950,000. They have the right to buy anytime during the lease term by providing written notice.

Key Takeaways

  • Grants right, not obligation, to buy.
  • Includes fee, price, and deadline.
  • Used in rent-to-own and commercial deals.
  • Requires clear terms and legal advice.
  • Can support long-term investment planning.

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

More For You

CREA: Winter Storms Suppress January Home Sales

CREA: Winter Storms Suppress January Home Sales
Max Sandelin/Unsplash

Canadian home sales started 2026 on a colder note, with activity dampened by severe winter weather across parts of the country.

According to new data released Tuesday by the Canadian Real Estate Association (CREA), home sales recorded over Canadian MLS® Systems fell 5.8% month-over-month in January. Actual (not seasonally adjusted) sales were also 16.2% lower than in January 2025.

Keep ReadingShow less

New (Free) Guide Shows Toronto Homeowners How To Tap Into ‘Missing Middle’

New (Free) Guide Shows Toronto Homeowners How To Tap Into ‘Missing Middle’

'Missing Middle' housing in Toronto

Liam Gill doesn’t describe himself as a developer, but that hasn’t stopped him from carving out a place in Toronto’s development landscape. Now, the lawyer and tech entrepreneur wants to help others do the same with his Citizen Developer’s Guide, released Wednesday morning in collaboration with More Neighbours Toronto.

The guide is designed for people like Gill — those without a formal background in real estate development, but with an interest in densifying their own home or investment property. Throughout the document, Gill walks readers through how to estimate build costs, cash flow projections, and ultimate market value, and go about the zoning, permitting, and financing processes.

Keep ReadingShow less

CIBC SQUARE’s Second Bay-And-Front Tower Reaches Full Lease-Up

CIBC SQUARE’s Second Bay-And-Front Tower Reaches Full Lease-Up

CIBC SQUARE

The second and final tower at Toronto’s CIBC SQUARE has officially reached full lease-up, marking a major milestone for one of the city’s most prominent office developments — and further signalling a bloom in the commercial real estate sphere.

La Caisse and Hines, alongside long-standing investment partner the National Pension Service of Korea (NPS), announced that 141 Bay Street, the 50-storey tower completing the two-building campus, is now fully leased.

Keep ReadingShow less

Rental Proving An Anchor In Canadian Real Estate For 2026

Rental Proving An Anchor In Canadian Real Estate For 2026

TELUS Living Nanaimo (Omicron)

Canada’s rental housing market may not always grab snappy headlines, but it’s quietly proving its staying power.

Across the country, large-scale organizations are putting capital into purpose-built rental housing, whether through acquisitions, repurposed properties, or REIT activity. The trend is less about flashy growth and more about steady, strategic investment — a trend that’s already shaping 2026.

Keep ReadingShow less

City Council Advances 3 Projects Under ‘Toronto Builds’ Framework

City Council Advances 3 Projects Under ‘Toronto Builds’ Framework

Rendering of 9 Shortt Street/CreateTO, Montgomery Sisam

Toronto City Council approved zoning for about a dozen housing projects at its February session — held last week — and of those, three will be rolled out under the new Toronto Builds policy framework.

Toronto Builds, approved in May 2025, consolidates the eligibility criteria and requirements of Housing Now, ModernTO, and the parking-to-homes and public developer initiatives. A CreateTO progress update from July identified 36 sites that will be developed under the unified framework, including the three that have just been green-lit by Council.

Keep ReadingShow less

Home Relocation Project Brings 17 Affordable Rentals To Sunshine Coast's shíshálh Nation

Home Relocation Project Brings 17 Affordable Rentals To Sunshine Coast's shíshálh Nation

Renewal Development

Via Renewal Development and Wesgroup, 17 affordable rental homes are now in the hands of the shíshálh Nation — marking the completion of a project that addresses the community’s housing needs while creating local opportunities.

Like many communities across British Columbia, the shíshálh Nation has been facing a housing crisis. This project tackles that issue head-on while supporting local economic development: roughly 70% of its construction work was carried out by shíshálh Nation entrepreneurs, providing jobs and skills training within the community.

Keep ReadingShow less

Build Canada Homes Pulls From Public, Private Sectors For Exec Team

Build Canada Homes Pulls From Public, Private Sectors For Exec Team

Valesa Faria (left) and Jeffery Coles (right) have joined the Build Canada Homes executive leadership team.

The economy may be acclimating to tariffs and interest rate pain has eased (for now), but Canadian housing remains sorely in crisis. Against that backdrop, Build Canada Homes (BCH) has its work cut out for it, and the agency is forging ahead with the appointments of Valesa Faria and Jeffery Coles to its executive leadership team.

While Faria will be stepping into the Senior Vice President of Partnership and Development role later this month, Coles assumed the Senior Vice President of Investments post in January.

Keep ReadingShow less

Hudson's Bay Left Behind 15 Million Sq. Ft Of Space. What Happens To It Now?

Hudson's Bay Left Behind 15 Million Sq. Ft Of Space. What Happens To It Now?

The closed Hudson’s Bay store in the Metrpolis at Metrotown shopping centre in Burnaby, BC. (Howard Chai)

We’re closing in on almost a year since the Hudson’s Bay Company (HBC) filed for creditor protection. Liquidating the company’s assets and closing all of its stores was the easy part — and has mostly been completed already. The hard part is determining what to do with the huge blocks of vacant space left in the company’s wake.

Across Canada, HBC operated a total of 96 stores, including not just the traditional Hudson’s Bay stores, but also a handful of stores under the Saks Fifth Avenue and Saks OFF 5TH brands.

Keep ReadingShow less
Privacy PolicyAbout UsTerms of UseAdvertise with UsJobsContact UsRSS Feed
All rights reserved SiteMedia © 2026.