ground lease vs land lease
Perhaps the biggest advantage for tenants is that a ground lease provides access to well-located land that otherwise could not be bought. The following is a typical term provision from a ground lease: Lease Term. You could also consider exploring another type of arrangement, rent-to-own, which allows you to eventually own the property and the land underneath it. At Bankrate we strive to help you make smarter financial decisions. A ground-rent arrangement is a situation in which someone must make monthly rental payments specifically for the land underlying a building they own. But there may be some tax implications on the rent they receive. Learn more about the pros and cons of ground leases. The Forbes Advisor editorial team is independent and objective. intended only as general information which As such, the success of a ground lease project may be dependent on the ability of the developer to secure lender-friendly concessions from the fee owner. A leasehold refers to an asset or property that a lessee contracts to rent from a lessor in exchange for scheduled payments over an agreed-upon time. Online training solutions to support your employees' needs and Consider limiting this right to institutional lenders. If the ground lessee acquires the fee interest in the property, it is arguable that the leasehold estate and fee estate have merged together (i.e., that the lesser estate (the leasehold estate) has been absorbed into the greater estate (the fee estate)), resulting in the extinguishment of the ground lease. Some lenders also request a second notice after the ground lessee has failed to cure the underlying default, though lessors legitimately object to this concept on the ground that lenders should not get "two bites at the apple". Finding a lender for a land lease can be problematic. Ground leases commonly take place between commercial landlords, who typically lease land for 50 to 99 years to tenants who construct buildings on the property. What is a Land Lease? (w/ pros and cons chart) - Blue Water Mortgage At the end of the term, ownership of the improvements may revert to the fee owner or the ground lessee may be required to remove them.
ground lease vs land lease