Ground Lease

Ground leases are a second tenure arrangement used by CLTs to secure land. A CLT can be the lessor or lessee under an agricultural ground lease. At times, the CLT can be the landowner, leasing land to an external entity to manage agricultural programming, as illustrated by the Madison Area CLT’s Troy Gardens project.  Alternatively, the CLT can lease land from an external title-holding entity. The Southside Community Land Trust, for example, serves as both lessor and lessee on a 20-acre rural farm in Cranston, Rhode Island.

A ground lease can provide agricultural land security comparable to fee simple ownership, though it is dependent on the length and terms of the lease. For example, a 99-year lease with unclear performance standards can put the tenant at risk of arbitrary termination. Similarly, the lack of clarity can put the lessor at risk of being unable to retake the property if the land is taken out of agricultural use. As is the case with the National Community Land Trust Network Model Ground Lease for housing, longer-term agricultural leases are considerably more complex than short-term leases. These should include rigorous terms for standards of performance, conditions for renewal, lessor succession and assignment, and the setting of a lease fee that balances the interests of the lessor and tenant. Therefore, long-term ground leases can be challenging to draft and implement, particularly in the absence of a model CLT urban agricultural lease.

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