Land Lease vs Fee Simple -> reporting questions

[NJAPRAZE]

appraising a 2-story [modular constructed] SFR home that is subj to a land lease; borrower owns the home, not the land (similar to a mobile home)... and the home has similar appeal as a detached SFR / Colonial.

homeowner pays a monthly land lease of $zzz (for lease and water/sewer)

2 Questions - how would you handle?

1) when reporting the property rights appraised -- do you check "fee simple" or "Other" [and indicate Land Lease]?

2) do you report the "monthly land lease" amount in the same field as HOA and check "PUD" [if part of a subdivision], or elsewehere [i.e. in narrative addendum]?

Thx in advance for your input!

 

[Mark K]

What property rights are you appraising? Fee simple implies rights in real property, i.e., the land.

I haven't done any of these but my understanding is that this arrangement, house or townhouse on leased land, is fairly common in some cities. Others will chime in but I think there's some F/F restrictions that include a minimum lease term, etc.

 

[NJAPRAZE]

What property rights are you appraising? Fee simple implies rights in real property, i.e., the land.

I haven't done any of these but my understanding is that this arrangement, house or townhouse on leased land, is fairly common in some cities. Others will chime in but I think there's some F/F restrictions that include a minimum lease term, etc.

exactly -- that's why I'm leaning towards Other-land lease [so a reader knows its an appraisal of the house without the land]

thoughts on how/where to report the land lease? in "HOA" field or elsewhere?

 

[J Grant]

Are there any adverse site conditions or external factors (easements, encroachments, environmental conditions, land uses, etc.)? Yes No If Yes, describe S I T E General Description Foundation Exterior Description materials/condition Interior materials/condition Units One One with Accessory Unit Concrete Slab Crawl Space Foundation Walls F

Above from the 1004 is where you would answer yes for land lease (site section of page one ) then disclose terms a 99 year land lease ground rent is $60 a month ,(for example)
use other land lease comps
leased fee - I have not appraised one, at one point looked into buying a house with a land lease decided against it but nothing wrong with it - some lenders do not loan on it while others will

 

[Dublin ohio]

So from the limited info provided. I am assuming that you have eliminated leasehold?

 

[Dublin ohio]

borrower owns the home, not the land (similar to a mobile home)

If it is similar to a mobile home lot lease. It creates a different set of problems. Mobile home lot leases are usually relatively short term. If you don't pay the lease. You are out of there. You take your mobile home with you. What happens in your situation if they default on the lease? Take apart the modular and take it with you?

 

[J Grant]

If it is similar to a mobile home lot lease. It creates a different set of problems. Mobile home lot leases are usually relatively short term. If you don't pay the lease. You are out of there. You take your mobile home with you. What happens in your situation if they default on the lease? Take apart the modular and take it with you?

The OP needs to research it and these days every topic is online.

Far as I know the land lease for the subject transfers on sale and perhaps is on the deed. If the borrower/house owner stops making the land lease payments the owner of the land can file a lien and move to foreclosure.

In a land lease the homeowner pays taxes on the house but not on the land so they save $ on property taxes

 

[James Micozzi]

appraising a 2-story [modular constructed] SFR home that is subj to a land lease; borrower owns the home, not the land (similar to a mobile home)... and the home has similar appeal as a detached SFR / Colonial.

homeowner pays a monthly land lease of $zzz (for lease and water/sewer)

2 Questions - how would you handle?

1) when reporting the property rights appraised -- do you check "fee simple" or "Other" [and indicate Land Lease]?

2) do you report the "monthly land lease" amount in the same field as HOA and check "PUD" [if part of a subdivision], or elsewehere [i.e. in narrative addendum]?

Thx in advance for your input!

This is a leasehold. the box next to fee simple is the one you check.

 

[glenn walker]

Its called asking for -

The OP needs to research it and these days every topic is online.

Far as I know the land lease for the subject transfers on sale and perhaps is on the deed. If the borrower/house owner stops making the land lease payments the owner of the land can file a lien and move to foreclosure.

In a land lease the homeowner pays taxes on the house but not on the land so they save $ on property taxes

The lease has to be for a term that is at least as long as the Mortgage Term - So ASK for a copy of the lease. If they cannot provide a copy of lease then decline the order and move on. You may be in over your head nothing to be ashamed of but you dont need to use Borrower and Client as a lab rat . If its on a lease its not FEE SIMPLE PERIOD

 

[J Grant]

I agree, leasehold would be checked not fee simple -