Ground lease agreements

Written by edward cox
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Ground lease agreements
A tenant in a ground lease rents land and builds needed structures on that land. (Countryside land image by Rose from

Ground lease agreements are long-term leases of land, often extending up to 99 years. A ground lease is for the land only, and the tenant is usually expected to construct buildings or improvements. These leases are typically for commercial purposes.

Renting the Land

Ground lease agreements, like other lease contracts, are an exchange of the use of property for rent payments. The agreement will describe the land to be rented and the amount and timing of the rental payments.

Property Expenses

The lease should specify which party is responsible for expenses such as taxes and insurance. In a ground lease agreement, the tenant usually pays all of these expenses.


Improvements or structures that a tenant adds to the property come under the ownership of the landlord at the end of a ground lease. An agreement should specify whether the tenant would receive any type of compensation for the improvements.

Termination and Renewal

Ground lease agreements often specify methods for renewing the lease at the end of the term. If the parties are interested in this, they should follow the procedures exactly as set forth in the agreement.

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