Draw Up a Land Lease Agreement Without a Lawyer

Standardized Legal Documents Draw Up a Land Lease Agreement Without a Lawyer

Land Lease Agreement Explained

If you are a landowner interested in leasing your plot, you must create a land lease agreement. Land-lease agreements can be tricky, so it is imperative to be familiar with their purpose and regulations.

While it may seem that creating a land-lease agreement requires legal expertise, it is not the case! With proper guidance, you can create any legal document by yourself. DoNotPay will show you how to write a legally valid land-lease agreement in no time!

Land Rental Agreement in a Nutshell

A land lease is a type of commercial real-estate lease. The land lease agreement enables the lessee to build property on the leased land. The main difference between a ground agreement and any other commercial contract is that the former focuses on the land itself and the lessee’s obligations towards it. 

The land lease agreement involves two parties—the lessor and the lessee. Both sides need to agree on the contractual obligations and sign the document once they do. The lessee needs to pay the rent regularly. If the lessee fails to honor their contractual duties, the lessor has the right to evict them.

Types of Land Lease Agreements

Two main types of land lease agreements are:

  1. Subordinated 
  2. Unsubordinated land lease agreement

The subordinated land lease agreement allows the lessee to use the property as a leasehold mortgage for the construction loan. That is beneficial for the tenant but not so much for the property owner. If the lessee fails to make mortgage payments, it can result in the owner losing the title to the property. The owner can lessen the risks of this land lease agreement by:

  • Increasing rental fees
  • Applying stricter control regarding the lease transactions

With the unsubordinated land lease agreement, the lessor can forbid the lessee to use the land as a leasehold mortgage. If the tenant fails to make construction loan payments, the property owner will take ownership of the land improvements.

The improvements can increase the leasehold market value, which is beneficial for the lessor.

How To Write a Simple Land Lease Agreement

When writing a land lease agreement, you need to present all the conditions clearly. There mustn’t be any doubts about how your property should be managed and used during the rental period. 

Here is an overview of key land lease agreement elements:

Land Lease Agreement Item Description

Land details

The description of the property should be as specific as possible, including:

  • Total acreage of the land
  • Land portion the lessee will be using
  • Property boundaries the tenant mustn’t cross
  • Topographical map of the land

Use of property

You should specify how the land can be used and who is responsible for maintenance and improvements

Duration of the agreement

A land lease agreement should have start and end dates, as well as terms for terminating the lease

Financial terms

You need to specify payment terms and the exact amounts in the land-lease agreement. You can ensure extra safety by:

  • Asking the lessee to provide proof of liability insurance
  • Having your liability policy

Legal review

Both parties should have their lawyers review the agreement to make sure no legal disputes arise in the future

Can I Write a Land Lease Agreement on My Own?

There are several ways to draw up a land lease agreement without overpaying for legal services.

The most common methods are:

  • Using an online template
  • Writing a document yourself

While online templates may seem like a simple solution, they come with risks. Most of the land-lease agreement templates available online are far too general. You will have a difficult time applying any of them to your specific situation. 

Creating a document yourself and having a lawyer review it is a valid option. You should be aware that the process requires a lot of research. You need to make sure that the legal terminology, your personal conditions, and your state’s law requirements are in place. 

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