Buying lease land in Palm Springs or Buying Fee Land in Palm Springs

Want to know the status of a particular lease? Click here and send me the name of the condo comlex or address of the single family home and I will send you the details. I have a current list.

First, let’s clear up the issue of the terms. Fee land means that you own the land and lease land is land that you are paying a monthly or annual amount to the owner for the use of the land. Not all lease land in the Palm Springs area is necessarily leased by a Native American, there are a number of private leases that came about over the years for various reasons.

I have worked with clients who refused to even look at lease land who later bought a property on lease land. The main reason is economics. You pay 20 to 25 per cent less for a property on lease land than one on fee land and since the property taxes are based on the purchase price you would pay less in taxes. Now the lease payments may offset the property tax, but the costs to borrow the money to buy the property will be less and that could add up to be significant.

To purchase a lease property in Palm Springs is the same as purchasing fee land in Palm Springs. The only difference is that you need the approval from the Bureau of Indian Affairs which is basically a $300 fee that you might be able to get the seller to pay. There is a period of time that is required to get the approvals, however, that is usually less than the normal 30 day escrow. Just be sure that you start the process when you open the escrow and don’t wait for the escrow company to do it on their own.

When searching for properties in Palm Springs the amount of the lease fee should be near the bottom of a typical MLS listing either above or below the HOA fees for property in Palm Springs. Keep in mind that the Indian lease amount is normally not included in the HOA fees in Palm Springs. The lease amount is usually stated on an annual basis, but most Indian lease fees in Palm Springs are paid monthly. You will receive a payment book from the Indian lease management company, similar to a car payment coupon book, and you just pay it every month.

When purchasing a property on lease land in Palm Springs there are two important issues to consider. The first being the amount of the lease and how much that will add to the purchase price over the years and the second is the term remaining on the lease. If the term is less than 35 years you may have to do some creative financing as most lenders won’t loan on lease land in Palm Springs that has less than 35 years to go. Usually the leases are being, or have been, renegotiated and extended. Keep in mind that technically the land and whatever is on it reverts back to the owner at the end of the lease. In California the maximum that a land lease can be is 99 years, therefore a lease that is renewed at the end of 65 years cannot be renewed again. Since the first land leases were initiated in the 1950’s that isn’t a current issue, but will be some day.

Please contact me for any specific issues involving land leases in Palm Springs. You can click here for a quick contact form are call me at 760 485 0858.