What Is a Land Lease Agreement?
A land lease agreement provides a tenant use of the land in question for a defined period of time in exchange for a specified amount of rent. In addition to lease length and rental amount, a land lease agreement generally includes the following information:
- description of the property
- terms of rental payments
- function of the land
- responsibilities of landowner and tenant
- insurance requirements
- termination conditions
Types of Land Lease Agreements
There are several types of land leases, each suited to different needs. Some are more commonly used for commercial real estate or agricultural purposes, while others address subleasing and residential properties. The table below outlines their key differences.
| Lease Type | Primary Use | Typical Duration |
|---|---|---|
| Ground lease | Residential or commercial | Up to 99 years |
| Agricultural property lease | Growing crops | 1 to 20+ years |
| Commercial lease | Commercial retail or business | Up to 99 years |
| Grazing agreement | Livestock | Short-term, seasonal |
| Subordinated lease | Residential or commercial | Up to 99 years |
Ground Lease
A residential or commercial developer leases land from a property owner for the purpose of constructing a building. The length of a ground lease is typically long-term, up to 99 years. When the lease expires, buildings and any other improvements belong to the landowner. Both parties may also agree to extend the lease, or the tenant may choose to purchase the land using a land purchase agreement form.
Most ground lease terms are written for a period of 20-50 years, but it’s typical for both parties to sign an agreement extending the terms of the ground lease in 10-year increments.
Agricultural Property Lease
An agricultural property lease is a legal agreement that allows a farmer to use a landowner’s property for farming activities in exchange for rent or a share of the produce.
Commercial Lease
A commercial land lease works the same way as a ground lease, but it is specifically used by a retailer or other commercial business owner.
Grazing Agreement
A grazing agreement is a legal contract between a landowner and a livestock owner that permits the grazing of cattle or other animals on a specific property. These agreements outline the types and numbers of animals allowed to graze and who is responsible for maintaining the land. Typically, this type of land lease is short-term, often lasting no longer than the summer grazing season.
Subordinated Lease
A subordinated ground lease protects a landowner if a tenant defaults on their loan or files for bankruptcy. It prioritizes the mortgage payment over the lease payment.
Why Use a Land Lease Agreement?
Using a land lease agreement protects your investments and fosters a positive relationship between landowner and tenant from the beginning. It provides you a written agreement that eliminates confusion, defines expectations for both parties, and provides you with legal recourse if the other party violates the terms of the lease. For these reasons, landowners and tenants should have a land lease agreement, which seeks to:
- define how the land is to be used
- outline financial terms
- establish obligations and responsibilities
- offer legal protections
- ensure compliance with laws and regulations
Key Terms & Clauses Explained
These are some terms and clauses you should understand prior to entering into a land lease agreement:
Rent & Payment Terms
There are various flexible options for structuring rent that can be tailored to meet your needs.
- Fixed rent: A stable monthly payment common in residential agreements
- Percentage-based rent: A base fee plus a share of monthly sales for commercial leases
- Benefits: Provides predictability or flexibility, depending on your business
Land Use Restrictions
These clauses define the allowable uses and modifications for the property.
- Usage limits: Clearly defined purposes—residential, commercial, or agricultural
- Approval for changes: Consent may be required before making improvements
- Property guidelines: May include limits on structure size, design, or access points
Subleasing Rights
Understand if and how a tenant can lease part of the property to another party.
- Tenant flexibility: The agreement may allow subleasing portions of the land
- Ownership remains: The landowner retains overall ownership despite subleasing
Termination & Eviction Rules
Know the key conditions that can end your lease or trigger eviction.
- Lease expiration: Ends on the set date unless renewed by both parties
- Early termination: Can occur if contractual obligations aren’t met
- Notice requirements: Clear timelines are set for ending the lease
- Eviction consequences: Non-renewal or breaches may lead to eviction
Liability & Insurance Requirements
Get clear on who covers what to protect both parties from risks.
- Shared coverage: Insurance responsibilities can be split between landlord and tenant
- Property insurance: Often provided by the landowner for risks like fire or disasters
- Liability insurance: Typically required for tenants to cover personal or business risks
Property owners may stipulate that the tenant must include the landowner’s name on a liability insurance policy so both are protected against lawsuits if someone is injured on the premises.
How to Write a Land Lease Agreement
Drafting your land lease agreement can be quick and straightforward with our easy-to-use online template. Just follow these simple steps to create a clear, legally binding agreement that protects both you and your tenant:
1. Enter Basic Information
Provide the names, addresses, and contact details for both the landowner and the tenant. This establishes a clear foundation.
2. Describe the Property
Include the property’s address, legal description, size, and boundaries. This ensures everyone knows exactly what land is being leased.
3. Define the Purpose
Clearly explain how the land will be used—whether for residential, commercial, or agricultural purposes—so the intent is unmistakable.
4. Set the Term and Rent Details
Specify the lease’s start and end dates, rental amount, payment schedule, and late fee policies. This clarifies expectations for both parties.
5. Outline Additional Key Terms
Decide on aspects like security deposits, tax and utility responsibilities, and rules for improvements or subleasing. Keep the language simple and straightforward. Also, you may want to consider adding necessary clauses covering termination conditions, dispute resolution options, and any state-specific legal requirements to fully protect your interests.
6. Review and Customize
Use our online document editor to adjust any details as needed, ensuring your agreement perfectly fits your unique situation.
Land Lease Agreement Sample
Below, you can view a sample land lease agreement PDF. You can customize this template using our document editor and then download in PDF or Word format.
Create a Legally Binding Land Lease Agreement
Creating a legally binding land lease agreement is easy, and there are many long-term benefits to using one. It eliminates any confusion involved in the leasing process and protects the investments of both landowners and lessees.
Legal Templates simplifies the process with an intuitive document editor that drafts, customizes, and updates your land lease agreement as it evolves:
- Customization: Personalize your land lease agreement to meet your unique needs
- State-specific documents: Ensure the agreement complies with state-specific regulations and statutes
- Unrestricted access: Edit, download, and print your agreement at your convenience
- Guided assistance: Access step-by-step instructions that guide you through the process
Benefit from the protections a land lease agreement provides without the unnecessary complexity or hefty legal fees. Draft your agreement today.
Frequently Asked Questions
What happens when a land lease expires?
When a land lease expires, the landowner and tenant can agree to renew the lease. Or the tenant must surrender improvements they’ve made to the land, which become the property of the landowner.
How much can I lease my land for?
Lease amounts depend on several factors including location, property type, and intended use. Agricultural land might lease for several hundred dollars per acre annually, while commercial leases can command higher rates. Consult local experts for guidance.
How do land leases work?
A land lease is an agreement where a landowner grants a tenant use of their land for a specified period in exchange for rent. It outlines responsibilities, usage guidelines, and terms for renewal or termination.
