Real Estate Questions: a. Who is responsible for building the structure and maintaining the site after...

Real Estate Questions:

a. Who is responsible for building the structure and maintaining the site after a ground lease has been executed?

b. At the end of the ground lease, what happens to the ownership of the real estate?

c. You want to take out a reverse mortgage for your duplex that you rent out to two tenants. Do you qualify? Why or why not?

Expert Solution

a) Almost always, all other expenses arising out of site development or after execution of ground lease execution are paid by the ground tenant – taxes, insurance, maintenance and other operating costs, environmental costs, and the rest. Therefore, ground tenant is responsible for building structure, its maintenance etc. Rest depends upon the ground lease contract terms.

b) A ground lease is an agreement in which a tenant is permitted to develop a piece of property during the lease period, after which the land and all improvements are turned over to the property owner. Therefore, it is very obvious that at the end of ground lease, ownership of real estate is transfered to landlord.

c) A reverse mortgage can only be used on a property that serves as the home owner's primary residence that they live in for more than six months out of the year. In other words, a reverse mortgage cannot be used on a vacation home, part-time residence or property that is rented out to someone else. In the question, the duplex is rented to two tenants, that means it is not available as owner's primary residence and therefore reverse mortgaage cann't be taken on it. Also there is a condition that there are no income, employment or credit qualifications. Therefore, I you dont qualify here.

ekkarill92 answered 2 years ago

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