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Frequently Asked Questions:

What is a ground lease – and how are improvements addressed in it?

In a ground lease, the tenant leases the land (or “ground”) and owns the improvements on it. The parties might enter into a ground lease in which the tenant buys the house or a barn or builds a new structure on the leased land. The tenant may then sell the asset (for example, the house) and thereby recoup his or her equity. Ground leases are common in the commercial sector; less so in agriculture. However, they are a creative option. One advantage is that the tenant builds equity in the owned infrastructure. See Equity Trust for more information on ground leases for farming.

Posted in: Lease Agreements, Maintenance and Repairs