Rent / LO to Short Sale Owner. Is this legal? What to consider?

[Harry Metzinger]

Hi BP, I am currently looking at a prospective investment property that is a short sale.  When I asked the listing agent about the property, he said that the family who currently owns and lives in the house want to stay in the house.  Without knowing the legality of it, I asked the listing agent whether the current owners would consider a rent to own (a.k.a. lease option) agreement?  My thought was they could rent the property for 2-3 years, restore their credit, and then purchase the property back from me.  Is this legal?  What should I consider before deciding whether to make an offer on this property?