More often than not, people ask questions like; what is a land lease? Or how many types of land leases do we have in Nigeria?
For the former, a land lease also called a ground lease, is an agreement that permits the tenant to use a piece of land owned by the landlord for some time in exchange for rent. Leased lands are mainly used for farming and temporary structures. There are three land lease options in Nigeria, and they are:
1. Residential Land Leases: Residential leases are uncommon but not unheard of for permanent real property, especially when a homeowner owns the house on the land in question. Instead, residential land leases are used almost exclusively for mobile or trailer homes. When a consumer purchases a mobile home, the buyer must find her land to park on at her own cost. Mobile home communities, colloquially referred to as trailer parks, offer mobile home buyers open land on which they can move their home under a residential land lease agreement. Mobile home land leases generally include hook-ups to water, electricity, and sewage as well.
2. Commercial Land lease: In commercial land leases, lands are leased for commercial purposes like parking spaces, event centres, shopping malls e.t.c. Some commercial leases require the tenant to pay rent plus the landlord’s operational costs, while others require tenants to pay rent plus property taxes and insurance. The four most common types of commercial real estate leases are,
3. Mixed development lease: Here, leased lands are used for both residential and commercial units, often with common or shared facilities. For instance, land can be used to erect a supermarket and a residential apartment or a parking lot and a residential apartment; there are so many instances.
Whichever lease option you decide to go with, always ensure that the documentation is complete and authentic to avoid fraudulent transactions.