Landlease

101 west 23rd? that means in a few years the market value will be next to zero since no none will be able to get a 30 year mortgage! unless the lease is extended and then the main goes up a ton.

A good attorney will probably keep away from leasehold property in Manhattan,
so much is fee simple, why would you want it?

The building doesn't own the land it is built upon & the high monthlies reflect the fact that the building is paying each month to lease the land. That fact would give me pause but there have been other threads on this site & not everybody seems to think it is a deal breaker. Perhaps by 2058 that building will come down & they'll put something else up.

And what will that lot cost to buy then? Best to stay away.

It means that to co-op doesn't own the land on which it is built. This raises two issues: 1) What happens if the landlord doesn't renew the lease on the land? and 2) The landlord knows it would be a huge hardship if the lease isn't renewed and can take advantage of the situtation to extract enormous rent increases.

I would stay away. You have to consider the resale value.

There is an earlier thread addressing this issue.

The bottom line is that there is absolutely NO REASON to buy into coop which does worship AND OWN the ground it sits on.

Is there a quick and easy way to find out if a coop is lanleased before you look at it, fall in love, and make an offer?

Another risk of owning a landleased coop - when the lease is up in 2058, the land is re-assessed, and the new rent would be based on the increased value; translation - HUGE SURGE IN MAINT FEES.

Given that these landleases are long term (hence locking in the value of the property for extended periods of time), you'll experience a large pop monthlies.

But if you plan to move out before the landlease is up for renewal it may not matter.

#8, the way you find out is by looking at the building financials. Your attorney would review these as part of the due dilligence before you sign the contract.

...or you can asked the broker. Maybe not as reliable a source but it would be tough to lie about this issue.

Landlease is bad, period. Especially when its half way through.

It's a very common arrangement in London ("leasehold" for a house, or something like "shared leasehold" for a what's basically a coop), and few people there seem to have a problem with it. I suspect the ground lease has an escalation clause, so that in 2058 the newly-assessed rent won't necessarily be a huge increase from 2057. But still . . .

Well - main problem - This isn't London and it isn't as common here.

I wonder if someone knows what actually does happen when I own a building on land that is not mine & the landowner has land upon which sits a building which is not his. ie, what's the scenario come 2058?

either purchase the land (and be saddled with a mortgage & prop taxes) or expect a huge increase in your lease payments, esp if the land is re-assessed and the values have gone up.

I have friends in Hawaii that built on leasehold land in the 60's. They saved on rent, but
now they are in their 80's and the beautiful home they built has no value, except if they
can scrap it for material. They leave nothing to their children and cannot get a reverse
mortgage. DO NOT BUY INTO LEASEHOLD PROPERTIES, YOU ARE ONLY SUPPORTING GREEDY DEVELOPERS
THAT WILL CONTINUE THIS STUPID PRACTICE!!!!!!!

#17, can you explain why their home has no value as a result of being on leased property? Is it because of the particular arrangement with the landowner?

Also, did they rent or buy? Each situation is differnt, and NY has diff laws then HI. Not to dampen your argument but that the perils of landlease in NYC might be diff than elsewhere.

Isn't most of the commercial property in Manhattan on land lease?

#18 - must be the person who fell in love with a landlease property.

They built their home on property they leased. Now the real estate has appreciated and
the company that leased them the property has decided that do not want to renew the lease.

The perils of leasehold property are identical.... You do not own the land!!!!
If you want to be stupid, then get all the leashold property you can buy.
They move alot of it to suckers..... again you are rewarding bad behavior.

This isn't London or Hawaii, you have mostly fee simple properties in Manhattan,
Why the hell would you want leasehold???????????????????????????????????????

#20, it's #18 here - my point was that the poster didn't elaborate, and that NYC is diff from HI so the argument may not be valid.

Personally I'd stay away from landlease but then again I'm only familiar with NYC.

Don't you feel that the landlease situation in BPC is far less dangerous. I mean everything down there is a land lease

I would assume that the peril of bpc--where every parcel is leased to nystate--would be quite a bit less than building a home on land on a 50 year leasehold owned by an individual company.

I meant leased from ny state

If landleases are common on London, than a seller doesn't have to worry about buyers prefering a building without a landlease. In NY, all buyers prefer a building that owns its land.

bpc landlease doesn't expire for 60+ years. Avg a person stays in one apt 5-6 years. This is not an issue for any buyers for at least thext next 30-40 years.

To simplify the scenario, let's say it's a single family home on a plot of land. Why would you want to build a home ON SOMEBODY ELSE'S LAND ?!? I hear about it in London & Mexico but the idea just seems nuts to me.

I don't care when the landlease expires. Many people in NY will not buy in a co-op with a landlease. That would limit my market when trying to sell in the future. So I wouln't do it.

As a registered Professional Land Surveyor I would not recommend a land lease
property, nor would my attorney friends.

Landleases are an issue - In BPC and Roosevelt Islan you are leasing from NYS so there is a very small chance that the state will say get off my property when the lease runs out. This case is about a guy who owns property on 23rd and 6th and leases it to a coop where for $750K you can buy a real 1200 square foot 2 bedroom. The problem is that the value of your apt will not appreciate like the rest of the market b/c 1) every year you are closer to having less then 30 years on the lease which means no 30 year mortgages which kills resalve value and 2) the monthlies will continue to escalate and fast b/c the coop wont wait untill there are 31 years left to negotiate and will try to add 10 years to the landlease in the next two which means they will have to increase the charges.

Agreed. Precisely why I feel secure buying in BPC, but would feel differently about buying in a less stable LL situation.

If I were a developer, why would I want to build on someone else's land. If it's a rental building I'm stuck with it or have to sell it but if it's a condo or co-op I just sell the units & I'm out & then the tenants are stuck with the problem. Maybe I just answered my own question.

Someone stated that they feel more secure with a land lease from the State of New York in BPC or Roosevelt Island. However what if the state has economic problems (they're always telling us that there's no money for this & for that) & are not able or disposed to renewing at a favorable rate?

It means get ready in 2057 for the bulldozers in 2058.

Many of these same arguments were aimed at plain old coops thirty years ago . . . who would buy a home that you don't actually own, but instead own shares in a corporation that gives you a 100-year lease to occupy a particular unit? It's just plain crazy, is what it is. You'll lose all your money!

Very different #36. The discussion is fee simple coops vs leasehold property coops.
Leased land vs rented land.

To OP. Go buy the book "New York Coop Bible" by Sylvia Shapiro. You can find it on Amazon. Goes into depth on this issue, plus many others.

SO, that's the problem at 101 W 23...a landlease. [sigh]

Same at 175 E 62 [sigh].

175 e 62 has a lease that expires in 2059, but the other problem is that the lease gets renegotiated every 10 years, so youa monthly payments go up at that time also

There's also a landlease at 301 East 63rd.

Stay away from land leased properties. BEWARE