The intricacies of land lease agreement

Nowadays the prices of land is sky rocketing. If you want a land for your business, then you should think about it twice as you have to spend a lot of money to purchase even a small piece of land. Many business people do not have a large sum of money, so instead of buying a land they prefer to take a land for a rent. This is called as a lease. You can lease a land for doing your business.

The owner of the land is the landlord who agrees to lease the land to a tenant for a particular sum of money. A lease generally runs for a longer period of time generally specified in terms of number of years. So it is necessary to have a land lease agreement between the landlord and the tenant. This agreement is very important as it gives the right to the tenant to use the land for the said purpose for a specific period of time by paying a fixed amount.

The land lease agreement is quite common as it is better than a sale and is advantageous to both the landlord and tenant. The landlord need not go in search of a new tenant for a certain period of time and the tenant need not spend a lot of money for purchasing the land he requires. Certain leases also run for 1 to 99 years. This gives the landlord a satisfaction of ownership of the land and gaining a good sum at the same time. But sometimes a situation arises where the landlord or the tenant want to stop the agreement. In such cases lease buy-out comes in handy.

In this case, the tenant will pay the landlord a certain sum of money and vacate the land which will be before the time specified in the lease agreement. Then the old agreement becomes null and void. This situation generally arises when the tenant wants to relocate his business to a new place or the landlord wants to find a new tenant for a higher income.

The lease buy-out has some legal obligations. If the agreement has an option of buy-out then only it can be done. Otherwise the lease continues to the time specified in the agreement. If the tenant is adamant and wants to break the agreement, then the landlord is in a position to get the full amount of the lease.

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