Ground Lease

AAA

DEFINITION of 'Ground Lease'

An agreement in which a tenant is permitted to develop a piece of property during the lease period, after which the land and all improvements are turned over to the property owner. A ground lease indicates that the improvements will be owned by the property owner unless an exception is created, and stipulates that all relevant taxes incurred during the lease period will be paid for by the tenant. Ground leases are typically for 10 years or more.

INVESTOPEDIA EXPLAINS 'Ground Lease'

A ground lease is typically a long-term lease, as lease holders would be unwilling to build costly improvements if the benefit of such improvements could only be realized for a small number of years. For the landlord, a ground lease allows the assumption of all improvements once the lease term expires. This permits the landlord to sell the property at a higher rate. For the tenant, a ground lease keeps the tenant from having to purchase potentially expensive land in order to begin a development.

RELATED TERMS
  1. Investment Real Estate

    Real estate that generates income or is otherwise intended for ...
  2. Lease

    A legal document outlining the terms under which one party agrees ...
  3. Real Estate

    Land plus anything permanently fixed to it, including buildings, ...
  4. Property

    1. Anything over which a person or business has legal title. ...
  5. Flipping

    A type of real estate investment strategy in which an investor ...
  6. Deed Of Surrender

    A legal document that transfers property ownership for a specified ...
Related Articles
  1. Should You Buy Property On Leased Land? ...
    Retirement

    Should You Buy Property On Leased Land? ...

  2. Tips For The Prospective Landlord
    Home & Auto

    Tips For The Prospective Landlord

  3. Do You Need A Home Inspection?
    Home & Auto

    Do You Need A Home Inspection?

  4. How A Bad Roommate Can Ruin Your Credit ...
    Personal Finance

    How A Bad Roommate Can Ruin Your Credit ...

comments powered by Disqus
Hot Definitions
  1. Passive ETF

    One of two types of exchange-traded funds (ETFs) available for investors. Passive ETFs are index funds that track a specific ...
  2. Walras' Law

    An economics law that suggests that the existence of excess supply in one market must be matched by excess demand in another ...
  3. Market Segmentation

    A marketing term referring to the aggregating of prospective buyers into groups (segments) that have common needs and will ...
  4. Effective Annual Interest Rate

    An investment's annual rate of interest when compounding occurs more often than once a year. Calculated as the following: ...
  5. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
  6. Odious Debt

    Money borrowed by one country from another country and then misappropriated by national rulers. A nation's debt becomes odious ...
Trading Center