Legal Question in Real Estate Law in California

Maybe, maybe not. Normally the existing debt on a property is irrelevant to a buyer, since the seller is normally obligated to deliver clear title when the sale closes. Only if under some odd provision in your lease option you would be required to satisfy the pre-existing debt after taking ownership, there would be no reason you should care, and in fact you would have no real right to know, what the seller's financial arrangements are.

If the lease provided that you would be able to purchase at substantially less than $1,000,000 and you were paying more in monthly rent because of the option to purchase [if you were getting any significant credit for the future purchase then your monthly rent was probably increased by that amount approximately], and thus you entered the lease only because you were intentionally mislead by the landlord, then you might be able to get out of the lease. Obviously the landlord would not be able to sell you the property upon your exercising the option unless you were going to pay him close to the amount due on the liens.