Association becoming Lessor

Started by GregU • 10 replies • 1541 views

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GregU (Illinois)
Posts: 2

Posted:

Our association is 131 members. All of us have individual 99 year property leases from the original developer that are renewable for $1 for a second 99 years.

The developer is getting elderly and no one in his family wants to take over.

Can the association legally become the property owner? What affect would this have on the original leases?

NpS (Pennsylvania)
Posts: 4,216

Posted:

Hi Greg

If your association buys the property from the developer for $XX, then the association becomes both the landlord and the tenant. When you are both the landlord and the tenant, you can terminate the lease. You should hire a lawyer who will draft the necessary documents and get them filed with the local Recorder of Deeds.

Don't be surprised if it doesn't go as simple as this. But if the developer and his family are ready to give up all future rights, it should be easy.

Sikubali jukumu. Read all posts at your own risk.

MelissaP1 (Alabama)
Posts: 13,836

Posted:

This was never going to be an easy issue. Considering no one lives for 200 years or you have an agreement with vampires... I have seen this situation in Mississippi with the land/water the casino are on. Believe it or not they have a similar arrangement. They have a 99 year lease with the land owners. It then reverts back to the owners.

In your case consulting a real eastate attorney may be useful. Typically HOAs do NOT own property. They just control the conditions and share common areas. Owning the land by HOA would make you ALL the owners. Itmay be better to arrange EACH Individual own their own parcel. It still can be a HOA but it would not be a group with revolving owners.

Former HOA President

TimB4 (Tennessee)
Posts: 21,059

Posted:

Greg,

What type of Association do you live in (condominium, mobile home park, single-family homes, etc.)?

GregU (Illinois)
Posts: 2

Posted:

Tim,

All single family homes. Rural subdivision.

TimB4 (Tennessee)
Posts: 21,059

Posted:

Greg,

My suggestion would be to either exercise your lease option early OR make a proposal to purchase the property outright.

Once the owner of the property dies, their estate will need to handle the lease or simply sell that property to someone.

Tim

JohnC46 (South Carolina)
Posts: 14,265

Posted:

I am not nor do I play a lawyer.

If the lease (99 then another 99) was registered with the deed then I believe it is in effect no matter who gets the property and they must deal with your association as in honor or try and buy you all out.

Now we can assume them buying you all out is not going to happen so they have to honor the lease.

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