What is a ground lease?

A ground lease is 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 is an agreement in which a tenant can develop property during the lease period, after which it is turned over to the property owner.

What is the difference between commercial ground lease and fee simple?

In commercial ground lease, a rent has to be paid to the lessor, whereas in case of fee simple, no rent is required. For ground lease, the ownership rests with the lessor, but in case of fee simple, the party to whom the property is transfers has the full right on it. This article has been a guide to what is Ground Lease.

What is an unsubordinated ground lease?

In contrast, an unsubordinated ground lease lets the landlord retain the top priority of claims on the property in case the tenant defaults on the loan for improvements. Because the lender may not take ownership of the land if the loan goes unpaid, loan professionals may be hesitant to extend a mortgage for improvements.