ttruthfully there are no hard and fast rules about lease options. There are some general practices, but buyers and sellers can decide which terms they are most comfortable with. That is why in the state of New York (where attorneys write the contracts and not agents) I strongly recommend you consulting with an attorney help before making decisions on terms.
It's a lease of a property accompanied by an option (but not a requirement) to purchase that property. Generally, the purchase price is established up front, along with what percent of the lease payments (if any) are credited toward the purchase price. Usually, there is an up-front option fee (NOT a deposit or down payment) that is credited toward the purchase price if the tenant-buyer decides to exercise the option and purchase. Otherwise, generally the option fee is forfeited.
A lease option is a lease with an option to purchase at a future date. It can be arranged many different ways. A downpayment can be made on the property and a portion of the monthly rent can apply to the purchase price with a ballon payment at the end. another way is to make payments along the way witha mortgage at the end of the renting period. Another option is ofr the owner to provide a mortgage for the buyer. There are many possibilities of arranging a lease to buy agreement. I would urge to obtain the advice of a Real Estate attorney before entering into an agreement like this as there are many pitfalls possible. While it could have advantages for certain types of buyers, be sure you get good advice first.