What makes a lease financeable?

Whether you are a borrower or a lender, if you are considering a loan supported by a ground lease, you need to be sure the ground lease is "financeable." A financeable ground lease includes either (a) "subordination" of the landlord's fee interest in the land or (b) provisions to protect the lender (as leasehold

What is a ground lease Australia?

A lease of vacant land that gives the tenant a right to construct a building on the land, at the tenant's cost, is known as a ground lease. Many councils have granted, and continue to grant, ground leases over council-owned land.

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Ground Lease with Lessee to Construct Improvements

Philadelphia Pennsylvania Ground Lease with Lessee to Construct Improvements

Name: Philadelphia Pennsylvania Ground Lease with Lessee to Construct Improvements
Brand: US Legal Forms
Rating: 4.62 (324 reviews)

Category:

Landlord Tenant - Ground Leases

State:

Multi-State

County:

Philadelphia

Control #:

US-1340854BG

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Instant download

Description

A ground lease is a lease of land only, rather than the structures on the land as well. It is also called a land lease. Such leases are governed contract law and vary by their contract terms.

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FAQ

Whether you are a borrower or a lender, if you are considering a loan supported by a ground lease, you need to be sure the ground lease is "financeable." A financeable ground lease includes either (a) "subordination" of the landlord's fee interest in the land or (b) provisions to protect the lender (as leasehold

Ground leases are also often called land leases, as landlords lease out the land only. Although they are used primarily in the commercial space, ground leases differ greatly from other types of commercial leases like those found in shopping complexes and office buildings.

A lease of vacant land that gives the tenant a right to construct a building on the land, at the tenant's cost, is known as a ground lease. Many councils have granted, and continue to grant, ground leases over council-owned land.

An advantage of the ground lease structure to the building owner is the ground rent payment is tax-deductible, while owning the land provides no tax shelter via depreciation. It is somewhat complicated to value a building that is subject to a ground lease.

At a minimum, lenders will usually require that the term of the lease extend at least 10 years beyond the final maturity date of the loan. In order for a ground lease to be financeable, a lender will require that its mortgage be superior to any mortgages encumbering the fee title to the property.

The benefits of a ground lease Ground leases allow landlords to retain control over their land while simultaneously receiving a steady income. If executed properly, they can be a win-win scenario for both parties. Land leasing also allows for flexibility and specialized financing mechanisms.

Under current accounting, the Ground Lease is generally classified as an Operating Lease and the straight lined rent expense is charged annually over the term of the lease.

With a land lease agreement (also known as a ground lease), you purchase the home but rent the land. One of the main advantages is the lower price of this unique arrangement. One of the main disadvantages is that you will not be able to build valuable equity in the land on which you live.

During the ground lease term, the tenant will typically own and depreciate the improvements. At the end of the term, ownership of the improvements may revert to the fee owner or the ground lessee may be required to remove them.

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In the land realizable upon expiration of the ground lease. Of Condemnation and Access Clauses in Commercial Leases.Landlord shall have no lien or other interest in the Tenant's Property. Immediately thereafter, Wissahickon, now owner, lessor, and lessee of the Property and improvement, terminated the ground lease with itself. A landlord can use one of several different commercial real estate lease types when renting out office space. Also, the improvements to the. Make sure that all blanks are crossed out or filled in before you sign anything. • Make sure you get a copy of the entire lease. Tenant shall endeavor in good faith to include the provision below within its written agreements with contractors performing construction of the Improvements,.

Philadelphia Pennsylvania Ground Lease with Lessee to Construct Improvements

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FAQ

What makes a lease financeable?

In what field are ground lease is most often used?

What is a ground lease Australia?

What is one distinct advantage of a ground lease in the US?

What makes a ground lease financeable?

What is the biggest advantage of a ground lease?

Is a ground lease an operating lease?

What are the pros and cons of a ground lease?

What typically happens to the improvements at the end of a ground lease?

Interesting Questions

What is a ground lease?

What are improvements?

Why would someone enter into a ground lease?

How long does a ground lease typically last?

What happens to the improvements at the end of the ground lease?

Can the lessee make alterations or additions to the improvements during the lease?

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