What is a Land Lease? – Marina City Club
Good Info to know about Land Leases:
Quick answer: In a land lease deal… you’re purchasing just the dwelling and paying rent on the land to the landowner who in this case is the County.
Who owns all of the leased land in Marina del Rey?
According to Behindthedeals here’s what happened: The County of Los Angeles was the largest source of funds to the completion of the marina, contributing over $15 million for land acquisition plus 50% of certain specified infrastructure costs. Upon the Marina’s completion, the County would ultimately own hundreds of acres of waterfront land plus the right to earn rental income from thousands of boat slips in the harbor.
Thusly, the county leased large parcels of water front land to developers and biz owners. Here are a few examples: Marina Harbor, Mariners Village, Waves, Dolphin Marina etc. These are essentially corporate type rentals…. including the new Marriott Hotel and Residences that’s almost completed. The one exception is the Marina City Club complex. This complex is a mix of both (Leasehold) condos and a few apartment units.
Here’s part of what to expect when purchasing a condo that is on a land lease:
- In addition to the monthly HOA dues, you will have a Land Lease fee that is pretty close to the HOA monthly amount.
- Property taxes work the same (1.25% approx. of the purchase price).
- Monthly Land Lease fee is not tax deductible.
- You do not pay taxes on the land that is leased.
- There is a 3% Transfer Fee (to be negotiated before escrow).
- Specific Lenders will fund on Leasehold properties. You must check with your lender (or, I can refer you to one).
- Note: A famous example of a ground lease building is the Empire State Building.
- There’s only one condo complex (that is touching/bordering) the marina that you’re able to buy at: Marina City Club
Here’s a great blurb I just read on Investopedia that sums up things really well:
Buying a home on leased land can be tempting when you see the low sale price, but the purchase involves many complexities that traditional home buying does not. Traditional home ownership probably creates the greatest financial security for most people, but buying a home on leased land may be a viable alternative for those whose major priority is buying into a particular community at a lower price than a traditional home or condominium, rather than building equity.
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Kirstin:
I happened to stumble on your post regarding the Marina City Club and adjacent properties, and noticed you stated that you could refer a lender for the Marina City Club. I don’t know how old this post is, but I’m the only exclusive lender for the Marina City Club. I’ve been funding loans there since 1994 and have funded in excess of 750 loans. As you may or may not know, financing the MCC is extremely difficult for many reasons. It was Wells Fargo and myself for many years, but they ceased financing in the Club in 2018.
We are a lender, albeit, a small one, but average anywhere from 25-40 transactions per year in the Club. Should you care to gather more information, please feel free to contact me:
Howard Myers
Financial Center West, Inc.
(888) 411-8800
(949) 540-0850
Thank you,
Thank you Howard! You are indeed the lender I was referring to.