Lease Land Neighborhoods In Palm Springs CA

Lease Land in the Coachella Valley

Once you understand the difference between Fee Land and Lease land you will still need to know which developments/neighborhoods are on lease land and which are not. This list is designed to help

you determine which is which.

To Understand the Lease Land Issues please see our Page about that in this blog.

Condos Located on Lease Land:

Biarritz
Biltmore
Caballeros Estados
Canyon Estates
Canyon Heights
Canyon Sands
Canyon South 1,2 &3
Canyon Vista Estates
Canyon West Estates
Casa Verde
Cathedral Canyon Country Club
Deauville
Desert Princess
Diplomat
Esprit
Estados South
The Fairways
Greenhouse
Kings Point
La Palme
Palm Regency
Plaza Villas
Ramon Estados
Rimcrest
Rio Del Sol
The Rose Garden
Saddle Rock Estates
Saddle Rock Gardens
Smoketree Racquet Club
St. Tropez Villas
Sunrise Palms
Sunshine Villas
Villa Alejo
Villa Caballeros
Village Racquet Club

Homes Located on Lease Land and In Specific Named Communities*:      

            

Bellamonte (Palm Springs)
Rio Del Sol (Cathedral City)
Desert Princess (Cathedral City)

*There are more homes that are located on lease land but not in a specific named development. Some of the neighborhoods that have both FEE and Lease land are  Andreas Hills, Victoria Park, Los Compadres, Canyon North, Sun Villas. For more details please call.

Some communities are undergoing lease land buy out discussions. Two recent lease land buyouts took place in

Canyon Estates (partial buyout)
Seven Lakes Country Club

If you have any questions please don't hesitate to contact us at 760-408-5300 or 760-861-5643 and as always Palm Springs' easiest and best home search is on www.PSagent.com

3 Bedroom Bungalow Canyon Sands

[slideshow]

3 Bed 2.5 Baths South Palm Springs.  Two private patios and a double attached garage.

See more information on 2567 S Gene Autry Trail #c Palm Springs CA 92264

Short Leases

All Land is Not Equal In Palm Springs CA

Short Leases:

A leasehold parcel of land means that you do not own the land you are only leasing it from the actual owner. Even if there is a structure on it, that you hold title to, the lease payment only entitles you to the use of the land – subject to the terms of the lease - and not actual ownership. (When you own the land this is called “Fee Simple ownership”)

Search for homes in Palm Springs, CA

In Palm Springs, Cathedral City and parts of Rancho Mirage California up to 50% of land is lease land. This is important when looking at property because land value can’t be factored into the value of the property. Typically this means that the price of a home located on lease land will look more attractive than the same home built on fee land, where you do have to factor in the value of the land.

All leases are different and terms and conditions must be checked carefully during the buying process. One major provision in many leases is that “leasehold improvements” are sometimes made permanent fixtures to the land. You may not remove them at a later date without the express consent of the leaseholder. In some cases this may extend to other improvements such as landscaping, awnings, trellis, and gazebos – anything permanently attached to the “leasehold improvement”.

The most important provision in the lease is the start and end date. The end date of the lease needs to be 35 years or longer from the date of your purchase. The reason is that banks granting you the standard 30-year mortgage product want the lease to have a five-year pad on it beyond the life of the mortgage. If a lease has less than 35 years on it we refer to it as a short lease and you cannot get a 30-year mortgage on it. Often times this means that the best rates are unavailable to you. Potential buyers, if you wanted to sell, might not qualify as the shorter the mortgage the higher the payment.

IMPORTANT: Not all lenders will loan on lease land – some who will, will not loan if the lease is short. If you need

assistance identifying a lender to help you with a loan on lease land please feel free to contact me. If you are purchasing on lease land it is crucial that your lender know how to process these loans. I have the resources to get you to the right loan professional. Please see my website www.PSagent.com for even more information on lease land issues.

Other Considerations with Lease Land:

-If you are financing the purchase the value will only be figured on the structure and not the land itself.
-What are the terms for lease land payment increases?
-What, if any, are the preset renewal terms and conditions
-Homeowners insurance does not factor in land value so this is unaffected
-You will be paying property tax on the value of the land. The IRS has ruled that the person who enjoys substantial use of the property pays the tax.

Lease Land And Fee Land Explained

When looking at property in the Palm Springs CA area you will often encounter the terms Fee Land or Lease Land. The term Fee always sends up peoples red flags but the reality is that you need to watch for Lease land. Fee Land comes from the term Fee Simple Ownership. Although that sounds like reverse logic it is just real estate lingo for paying for land and owning it outright. You pay your "simple fee" and assume full ownership rights to the land. Your obligation after that is property tax only.

Not so in Lease Land which actually comes from the term Leasehold. In Lease Land scenarios you

never own the land. People are sometimes further confused because vacant lease land parcels will sometimes be offered for sale - at what may seem like a fair price for the land. Buyer beware because in a leasehold situation you are only purchasing the right to pay the lease. You become the lessee, bound to the payment structure and terms of the lease. All leases are different. Some are owned by huge groups of people with very small fractional ownership rights and others are owned by a few people sometimes just one person. Leases can also be held by private companies.

People frequently ask about the physical structure on the property. Yes, it can be and is sold to you. No, you cannot remove it. Technically anything done to the land is considered a “leasehold” improvement and the beneficiary of that improvement is the leaseholder. I have seen leases with clauses that state the leaseholder is allowed to inspect the property and require you to maintain it to certain standards. Even though I have never heard of anyone having a leaseholder inspection that language is in the lease.

Another issue is taxation. People often say that they think that they should not be taxed for the value of the lease land that their home sits on. The government sees it differently. The IRS has ruled that in the case of lease land with a structure on it they can tax the person who is enjoying the “benefit” of the leased property. This effectively gets them around the fact that they cannot tax the Indian Tribes who control a large percentage of the lease land in the Coachella Valley.

In the case of Short sales or Foreclosures on a home located on lease land the leaseholder is going to be like any other creditor. They will be in line and must sign off on any agreement for debt forgiveness or transfer of the property. In fact the leasehold has right superior to the lender in many cases. This of course adds another step to these complex procedures.

So what is the benefit of buying on Lease Land? Primarily you are getting more structure for less

People Want to Know!

money. Since you are not paying for the land upfront - basically a lease is pay as you go - the amount of money you are paying is for the structure alone. This affords you a larger home for less money than one on Fee Land where the seller is trying to recoup some of the cost of the land. Then there are also cases where a particular property is very desirable from a location and/or view standpoint and people simply want it. The compromise for living there is that you have to pay the lease.

Coming soon… What is a short lease? If you have any questions about lease land properties in the Coachella Valley please feel free to e-mail me.