Which of the following statements is true regarding the lessee's ability to purchase the leased property?
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A. B. C. D.C
The correct answer to this question is C. If the lessor allows the lessee to purchase the property at the end of the lease term, the purchase price must be disclosed in the initial disclosure statement.
Explanation: Under a lease agreement, the lessor (owner of the property) allows the lessee (the renter) to use the property for a specified period of time in exchange for periodic payments. At the end of the lease term, the lessee may have the option to purchase the leased property from the lessor.
Option A is not correct because the lessor is not required to allow the lessee to purchase the leased property. The terms of the lease agreement, including any purchase options, are negotiable and are agreed upon by both parties before the lease is signed.
Option B is not correct because there is no regulation on the amount a lessor can charge for the purchase of the leased property. The purchase price is typically negotiable and will depend on various factors, including the value of the property, the terms of the lease, and market conditions.
Option D is not correct because there is no requirement for mutual agreement on the purchase price. The purchase price is typically set forth in the lease agreement or in a separate purchase option agreement, and it may be based on a formula or determined through negotiation between the parties.
Option C is the correct answer because if the lessor allows the lessee to purchase the property at the end of the lease term, the purchase price must be disclosed in the initial disclosure statement. This is required by the Truth in Lending Act and Regulation Z, which apply to consumer leases. The initial disclosure statement must also disclose the annual percentage rate, the total amount of payments, and other key terms of the lease agreement.