Many Expats have knowingly entered 10 + 10 + 10 year lease contracts which unfortunately are not binding, and most of us know that most 30 year leases are nothing more than a ticking time bomb, why? It should be obvious: If a land owner decides not to recognize the second ten or third year lease you will be in deep trouble my friend, particularly if you invested heavily in building “your home”. What if the land owner elects to break the lease even before the first 10 year term expires?
Contrary to popular belief and misinformation, Lessee’s do have some rights, but under very specific conditions and May not always recover their full investment and in the best case scenario may only be able to negotiate some options with a substantial loss on the Lessee’s part.

It would appear that some, if not most people, which signed 30 year leases did so because the price seemed right at the time, but weird enough, and by reviewing several dozen leases, I am yet to see the first one which specifies the criteria to be implemented in the event the Lessee builds a house on the landlord’s property, nor have I seen anything concerning the process in the event that the lease term expires or is terminated ahead of the agreed expiration date, etc. These are “grey areas”, which are often times capitalized by greedy landlords and/or their descendants, and the majority of the time, it is the Lessee and or its beneficiaries who are bound to lose.

As it often happens, and particularly on leases signed over twenty plus years ago, the Lessee may not had planned for things to go bad or might have planned to transfer this hot potato to someone else before it scalded them.
Just picture yourself in the following scenario:

A 30 year lease is nearing expiration or Lessee/ Lessor has died, the descendants of one another may, and usually do, will eventually have major differences. The Lessor’s Estate may renege on the terms of the lease and attempt to raise the price of rent or kick the other party out to take over the house, in spite of the lease still being current and/or the Lessee’s Estate may wish to enjoy, sublease or transfer the property without knowing that they actually have no right to the property because their folks did not ever own the property, only the house and improvements.

What to do:

If it looks like a duck, swims like a duck and quacks like a duck, then it probably is a duck.

If you are being offered a long term lease which is really affordable and you are thinking of building a house on top, DONT! A lease should always include mention of the right of the tenant to build a home and clearly and fairly establish a criteria regarding the tenant’s house if the lease is ever broken.

If you are already committed to a long term lease and own, rather, you built the house on top of the landlord’s property, then explore as many options with the landlord concerning your investment, unless you simply plan to walk away, as I sadly seen in more than a few cases.

Options should include, (considering you are current with rent payments):

- Agreeing under a clause in the contract, or by a later Addendum whereby the landlord recognizes that the house was built by the lessee, that the house is not part of the property and that Lessor will not adjudicate it because of the expiration or early termination of the lease without discussing and agreeing to a potential purchase based on fair and current commercial value over the Lessee’s house and improvements.

- Purchase option to be executed by the Landlord.

- Agreeing to an extension of the lease.

- Etc.,

If none of these options are accepted by the Landlord do seek timely legal representation, that is, don’t wait until the very last moment because the landlord may exercise one of several options and evict you and adjudicate the property.
Now, are you sure you plan to enter a lease which may eventually result in you losing the investment of tens if not hundreds of thousands of dollars in construction and improvements?

Think about it.