Queens, NY asked in Real Estate Law for New York

Q: what are the pros and cons of land lease buildings

i have to move. i saw a coop in my budget but dont want to get into some deal that comes back to bite me in a few years

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2 Lawyer Answers
Michael David Siegel
Michael David Siegel
Answered
  • New York, NY
  • Licensed in New York

A: You have to distinguish between a private land lease and a public. The public ones, like Hudson Yards are fine. The private ones should be avoided. There are no pros.

Elaine Shay
Elaine Shay
PREMIUM
Answered
  • New York, NY
  • Licensed in New York

A: Unlike the usualy situation where a coop owns the land that its building is contructed on, a private land lease arrangements mean the coop essentially leases the land that its building sits upon. When that land lease expires, the owner of the land can negotiate and obtain a large increase in the rent for the underlying lease. As a result of the uncertainty regarding future costs, coop unit prices tend to drop significantly as the end of the land lease expires due to uncertainty and expected rising costs.

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