Lease Or Own Land: Depends On Primary Residence Or Vacation Property

Added February 20, 2009 by Ilyce R. Glink

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Summary: Deciding whether to lease our own land depends on whether the property is going to be a primary residence or vacation property. A reader wants to "purchase" land that Georgia Power owns, but it's a 99-year lease, instead of actually owning it. Ilyce explains that a 99-year land lease means that after 99-years, the land and the home on it would go back to Georgia Power, which is why as a primary residence it would be fine, but as vacation property, you'd want to own it, in case you want to keep it in the family.

Q: We were thinking of buying a lake lot and some of the properties we were looking at said, "Fee Simple" can you tell me what that means? Also, I know some of the properties are owned by Georgia Power and what I was told is that you don't really buy them, you lease them, like with a 99 year lease, you own the house and anything you build on the property, but Georgia Power owns the land.

A:Either a property is owned "fee simple" or you're leasing the land. Two things that are very different.

With fee simple, you own it. With a 99-year land lease, it's like owning it, except you don't. You might own the house, but at the end of the lease term, the land and house (unless you moved it) would revert back to Georgia Pacific. Of course, you won't be living there in 99 years, and it shouldn't affect you at all, nor the buyers who follow you, but if you're buying vacation property that you hope to hang onto for generations to come, I'd suggest you own rather than lease, or your grandchildren could find the house being yanked out from beneath them when the lease expires.

Please seek the help and advice of a real estate attorney if you decide to do a 99-year lease.

Jan. 1, 2004.

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