What Is A Ground Lease Agreement?
A ground lease an agreement is a contract between a tenant and a landlord that the tenant is allowed to improve the property during the lease period. After the lease period has been over, then the land, as well as the improvement, will be turned back to the owner. On this page, you can download the ground lease agreement templates without signing up and pay.
- The tenant can develop the property and then after the lease period is over, all of the improvement and land will be turned over to the owner.
- This agreement is commonly used for commercial leasing business in which the tenant will rent the land for 50-90 years and the tenant will construct the building.
- If the tenant is not able to afford land, the ground lease agreement seems to be the best option. Furthermore, the landlord also gets steady income while is still able to control the land.
The Use Of Ground Lease Agreement Form
Note that the ground lease agreement indicates that all of the improvements done on the property will be turned back to the owner unless there are some stipulations and exceptions created in the early time of the deal. This includes the taxes which this should be the landlords or tenants. In this case, the landlord is allowed to sell the property at a higher rate.
Furthermore, the ground lease agreement form is completely different from other commercial lease agreements. Usually, other lease agreements don’t assign the lessee to be responsible for certain things. The tenants are mostly changes due to their business.
A Ground Lease Advantages
- For Tenants – The tenants don’t have to purchase the land to build a property. For these reasons, it is way easier and cheaper. That’s why a big company like Starbucks and Whole Foods often use ground leases. Furthermore, there is no down payment to secure the land.
- For landlords – The landlords can gain stable income from the tenant while still have the property in hand. However, note that there are still tax savings for landlords who are using the ground leases. Besides, the landlord is still possible to have control of the land about how the property is used and utilized with certain provisions they make.
What Are The Basic Things To Know In Making The Agreement?
There are some elements you should underline when drafting the agreement, such as:
- Pictures Sell – Never underestimate the power of the pictures because this speaks a thousand words.
- Location – In this case, the location is very important which allows the tenant to figure out their potential when they are renting your land for business.
- The Leasing Game – Each party should understand the details about the land that is being leased. If you need to hire an expert to help you make the best draft, do it. By doing this, you can make something manageable while still can be able to maximize the potential of the lands.
Ground Lease Agreement Templates Sample