What defines a ground lease?

A ground lease is specifically characterized by the leasing of land itself, while the tenant may have the right to develop or build on that land. It is typically a long-term arrangement, often lasting several decades, which allows the tenant to construct buildings or make improvements to the property without owning the land itself. In this type of lease, the tenant has the right to use the land for a specific purpose, and once the lease term expires, the ownership of any structures or improvements made generally reverts to the landowner.

This definition aligns with the concept of a ground lease, distinguishing it from other types of leases, which might focus on different aspects such as the leasing of buildings or properties with the expectation of short-term use, or those with variable rental payments based on market conditions. The lengthy duration and the focus solely on the land are key characteristics that define a ground lease.