What Is The Ground Lease?
Community Land Trust (CLT) homes cost less than market rate homes because the CLT homebuyer purchases only the house and enters into an agreement with the CLT for the use of the land, this agreement is a Ground Lease.
The Ground lease (executed between the CLT and the homeowner) allows the homeowner to secure, long-term rights to the land and it protects the assets of the land by providing the land trust certain rights to safeguard the condition and affordability of the home.
Therefore, the CLT homeowners have exclusive use of the land, and they have full responsibility for the property.
The nominal lease rates are different for each CLT, but with all CLTs, the lease fee gives the homeowner full use of the land from the CLT.
The ground lease is renewable, transferable to the family’s heirs, and ensures full rights of privacy.
The ground lease also provides a resale formula that is used to determine the sales price based on market conditions, if and when, the family decides to sell their CLT home.