Advantages of ground rent from a landlord’s perspective

The breakout of the infamous ground rent scandal may have persuaded the leaseholders to sell off their properties to a suitable buyer to avoid the ground rent scandal. However, it could be considered as a major plus if you are a landlord.

You are more likely to garner a number of advantages if you are a landlord to a leased property. Once, you familiarize yourself with these advantages then, you would realize that how beneficial it could be for you:

  • A ground lease avoids the recognition of gain, which the landlord often has a right on, and it could prove beneficial to them if the property was sold off to a suitable contender or tenant. While there are no stipulated income tax imposed on behalf of the landlord—there would be certain income tax consequences, which the tenant would be required to pay.
  • The landlord is more likely to retain fee ownership to the leased property. It is considered as an important module, as a majority of the families and owners, who are more likely to establish a long-term ownership would certainly use the property for economic or commercial purposes.
  • Through various provisions in the ground lease documents, a landlord may retain some element of control over the development and permitted uses of the land that is leased under the ground lease. Many ground leases require a tenant to develop, construct and operate a specific type of commercial project and not change the nature of the project without the landlord's prior approval.

A landlord is given the rent by the tenant, and it serves as a mean to supplement its income in the long run. You should be familiar with the regulations of ground rent and other types of rent, which would be given as a rent from your tenant.