What is the exam-ready distinction?
| Roadmap post | 207 of 500 |
|---|---|
| Official syllabus topic | Contracts: Lease Options, Purchase Obligations, and Default |
| Official PSI area | Contracts |
| Published weight | 19% of the 100-question national portion |
| Source edition | PSI Georgia Candidate Information Bulletin dated July 1, 2026 |
| Content checked through | August 2, 2026 |
The Rule
PSI publishes a weight for the complete official area, not a guaranteed count for this individual comparison. Use the source, document, actor, event, and timing stated in the question before applying a memorized definition.
Side-by-side comparison
Read across each row. The terms are deliberately compared on identical dimensions so the difference remains clear when the exam hides the vocabulary inside a scenario.
| Decision dimension | Lease option | Lease purchase |
|---|---|---|
| Purchase feature | Tenant receives a right, but generally not an obligation, to buy | Parties generally undertake a binding future purchase obligation |
| Exercise | Tenant must exercise exactly as the option provides | Purchase duties follow the signed agreement without a separate election in the usual model |
| Failure to buy | Option may expire and option consideration may be lost as provided | Can create purchase-contract default remedies |
| Caution | Rent credit and option consideration depend on the document | Labels vary, so legal effect controls |
Decision rule
Georgia-specific distinction
Worked example
Scenario. A tenant pays stated option consideration for the right to purchase by June 30 but makes no promise to exercise the right.
Reason it through. Only the owner is bound to keep the purchase opportunity open. The tenant retains a choice rather than a purchase duty.
Answer. The arrangement is a lease option under the facts given.
Common exam traps
- Assuming the label controls over the promises
- Treating rent as automatic purchase credit
- Ignoring option exercise formalities
- Assuming a lease purchase guarantees financing
Original practice questions with detailed explanations
These are original instructional questions mapped to the July 1, 2026 PSI outline. They are not copied from PSI or any live examination. Choose an answer before opening the explanation.
Question 1Which arrangement ordinarily gives the tenant a choice rather than a duty to buy?
- A. A binding lease purchase
- B. A security deed
- C. A novation
- D. A lease option
Show answer and explanation →
Answer: D. A lease option
A lease option is correct. A lease option combines tenancy with the tenant's right to elect a purchase during a stated period. A lease purchase generally combines tenancy with a binding agreement to complete a later sale. The document's actual promises control because forms and speakers sometimes use the labels loosely. The remaining options, A binding lease purchase; A security deed; A novation, do not match the controlling category or fact.
Question 2A tenant pays stated option consideration for the right to purchase by June 30 but makes no promise to exercise the right.
- A. The arrangement is a lease option under the facts given.
- B. It is a lease purchase because every tenant must eventually buy.
- C. The option consideration guarantees a mortgage approval.
- D. The tenant owns the property before exercising.
Show answer and explanation →
Answer: A. The arrangement is a lease option under the facts given.
Only the owner is bound to keep the purchase opportunity open. The tenant retains a choice rather than a purchase duty. The supported conclusion is: The arrangement is a lease option under the facts given. The other choices replace those controlling facts with a neighboring concept or an unsupported absolute rule.
Question 3What should a candidate identify first when comparing Lease Option Versus Lease Purchase?
- A. The option with the longest definition, without classifying the facts.
- B. Ask whether the occupant may choose not to buy or has already promised to buy, then inspect exercise, rent-credit, financing, default, and deadline terms.
- C. A memorized Georgia rule, even when the question asks for a national concept.
- D. The answer that sounds most favorable to one party, regardless of the document or event.
Show answer and explanation →
Answer: B. Ask whether the occupant may choose not to buy or has already promised to buy, then inspect exercise, rent-credit, financing, default, and deadline terms.
Ask whether the occupant may choose not to buy or has already promised to buy, then inspect exercise, rent-credit, financing, default, and deadline terms. That sequence identifies the legal category before the label. Definition length ignores the facts, jurisdiction confusion answers a different question, and sympathy cannot replace the document, event, calculation, or governing rule.
Mastery tracking
Mark this distinction mastered only when every statement is true.
- Define every compared term without using the other term as the definition.
- Rebuild the comparison table from memory.
- State the decision rule and Georgia distinction without notes.
- Solve the worked example after changing one controlling fact.
- Explain why every trap and distractor is tempting but wrong.
- Answer all three original questions correctly in mixed practice on a later day.
Recommended next lesson
Continue with Client Versus Customer Under Georgia BRRETA. Continue to roadmap comparison 208.
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