What Is a Land Lease Agreement?
A Land Lease Agreement, also known as a Ground Lease Agreement or a Land Lease Contract, is a written agreement that allows the tenant (lessee) to use a piece of land owned by the landowner (lessor) in exchange for rent payments. This document is very similar to a traditional property lease, and tenants can use it for residential, agricultural, and commercial purposes. An agricultural land lease can include the use of the land as a farm for crops, or pasture for animals like goats and sheep. A commercial land lease sometimes involves building a parking lot or installing a billboard. A residential land lease can allow for a spot in a trailer park for mobile and trailer homes or a right to build a small cabin in the woods.
A land lease contract defines the relationship between the landlord and the tenant covering all concerns related to land rentals. It creates a proper agreement binding to both parties. Before you print out your contract, you need to know that there are different requirements and specifics in every state. If you wish to create your own agreement to lease land, you can find ready-made templates for each state below.
How to Draft a Land Lease Agreement?
Every land lease contract is subject to bargaining and negotiation, and therefore it is different from any other. However, it is necessary to include the following information to make the agreement valid:
- Names and contact information of the landlord and the tenant;
- Property's full address and description. The land must be safe and habitable. The description of the land must be legally recognized using metes-and-bounds, diagrams, photographs, and a detailed written description;
- Duration of the agreement (the start and the end date of the lease);
- Amount of rent, due dates, and the method of payment. This provision depends on the length of the lease, the intended use of the land, and the amount of land used;
- Amount of security deposit. Often the landowner asks for additional money as security for possible damages to the land;
- Duties and responsibilities of both parties;
- Pet prohibitions and requirements;
- Utilities. State which party is responsible for supplying water, electrical power, and other basic necessities;
- Maintenance. It is recommended to address which party is responsible for maintaining the land in a certain condition;
- Improvements. The tenant needs a landlord's written permission to make improvements or alterations on the land, and the landlord may or may not keep those improvements;
- Access. The agreement must show whether the landlord retains the right to enter the land at certain times;
- Choice of law. The parties choose which state's laws will be used to resolve any possible disputes. Also, it is possible to opt for mediation or arbitration;
- Government regulations. Sometimes it is necessary to clarify which party has to ensure the use of the land does not violate zoning laws.
It is not uncommon for a ground lease agreement to mention insurance, the number of inhabitants or guests that can stay with the tenant, and the subletting clause. Sometimes land leases allow the tenant to construct a permanent or temporary structure, which must be explicitly stated in the contract.