What is a "land lease" in real estate?

A "land lease" in real estate refers to a rental agreement that grants the lessee the right to use a specific parcel of land for a defined period of time while typically paying rent to the landowner. This arrangement allows the lessee to build or improve the land and utilize it for various purposes, such as commercial development or agriculture, without directly purchasing the land itself.

This type of lease is particularly common in cases where the landowner seeks to retain ownership while still allowing others to use the land for specific activities. The terms of a land lease often dictate the length of the lease, any rent increases over time, and stipulations regarding the maintenance and use of the property. This flexibility can be advantageous for developers or businesses that want to invest in improvements without the substantial initial capital outlay that purchasing land requires.

In contrast, a purchase agreement for land would involve a transaction where ownership is transferred, while a mortgage pertains directly to financing the purchase of real estate. Acquiring property titles is related to the legal ownership of real property, which is not the central concept of a land lease.