Drafts U.S. ground lease agreements for long-term land leases (49–99 years) where tenants construct improvements on landlord-retained fee property. Covers term structures, leasehold mortgage protections, rent escalation, improvement ownership/reversion, subordination, condemnation, and environmental allocation. Use when drafting, negotiating, or reviewing ground leases for commercial real estate (retail, office, hospitality, mixed-use, public-private partnerships).
Drafts U.S. ground lease agreements for long-term land leases (49–99 years) where tenants construct improvements on landlord-retained fee property. Covers term structures, leasehold mortgage protections, rent escalation, improvement ownership/reversion, subordination, condemnation, and environmental allocation. Use when drafting, negotiating, or reviewing ground leases for commercial real estate (retail, office, hospitality, mixed-use, public-private partnerships).
Drafts a financeable ground lease governing long-term land use where the tenant constructs improvements on landlord-retained fee, with improvements reverting to landlord upon expiration.
Payment: due dates, late charge (5% after 10–15 day grace), default interest (prime + 3–5%). Verify usury compliance.
Taxes: tenant pays all real property taxes (land + improvements) directly; annual evidence; may contest but must prevent liens on fee.
4. Use, Development & Improvements
Permitted use: reference zoning; broad enough for evolution but restrict environmental-risk uses and covenant violations.
Construction milestones: commence within 6–12 mo; complete within 12–36 mo; completion = CO or AIA substantial completion; failure triggers landlord termination right or rent acceleration.
Improvement ownership:
During term: tenant owns, may depreciate and encumber via leasehold mortgage
Expiration: revert to landlord without compensation (unless negotiated otherwise)
Trade fixtures/equipment: removable if not affixed
5. Maintenance, Compliance & Insurance
Tenant responsible for all maintenance (structural and non-structural) to first-class comparable standard.
Consent: landlord required (not unreasonably withheld/conditioned/delayed); 30–60 day response; deemed consent if silent.
Criteria: net worth ≥ [X × annual rent], comparable operating experience, no prohibited use, audited financials.
Permitted (no consent): affiliate transfers (original tenant liable or transferee comparable), merger/consolidation to equal+ entity, leasehold mortgagee foreclosure.
No recapture right — inappropriate given tenant's capital investment.
8. Leasehold Mortgage Provisions
Critical for institutional financing. Include all:
Right to mortgage: tenant may encumber leasehold + improvements without consent
Lender notice: landlord sends all default notices to registered lenders simultaneously
Lender cure rights: tenant's full cure period + 30–60 additional days (monetary); reasonable additional time for non-monetary defaults requiring possession
New lease right: if ground lease terminates for tenant default, lender may elect (within 30–60 days) to receive new lease on identical terms, curing all defaults and arrears
