Ground lease

Review the land, improvements and financing separately

A ground lease gives agreed rights to use someone else's land. Identify the landowner, leaseholder, parcel and the rights in any existing or proposed buildings. The contract and applicable law govern those interests; do not assume the tenant owns every improvement permanently or that the landowner has no continuing responsibilities.

Review the term, renewal rights, rent changes, permitted development and use, approval conditions, taxes, insurance, maintenance and complete project costs. Establish what happens after default, casualty, termination or expiry, including improvements, restoration and any compensation. Obtain qualified legal, title, tax and development advice before committing; the label supplies neither a standard duration nor a guaranteed income or investment result.

Subordination concerns the priority of interests. Have counsel and the lender identify exactly which land or leasehold interests secure the proposed debt, along with consent, notices, cure rights and default consequences. Do not infer a lender's rights or approval from subordinated or unsubordinated alone. Fannie Mae's leasehold guidance illustrates one program's separate eligibility review, not a rule for every loan. Keep the executed lease, amendments, approvals, financing records and deadlines together; Rentari does not structure or approve a ground-lease transaction.