Property Ownership
What is a 'ground lease' in commercial real estate?
AA lease for agricultural land only
BA long-term lease of land where the tenant constructs and owns the building, paying rent to the landowner✓ Correct
CA lease for underground parking facilities
DA lease of the first floor of a commercial building
Explanation
A ground lease is a long-term lease (often 50-99 years) of land only, where the tenant constructs and owns the improvements on the land. The tenant pays rent to the landowner, and at the lease's expiration, the improvements typically revert to the landowner.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
EasementA non-possessory right to use another person's land for a specific purpose.
EncumbranceAny claim, lien, charge, or liability attached to real property that affects its value or limits its use.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
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