A ground lease separates ownership of land from ownership of improvements. Terms run for decades, and the document must anticipate circumstances no one can foresee.

Term and rent. Long enough to amortize the improvements — commonly fifty to ninety-nine years — with periodic increases by fixed steps, index or reappraisal. Reappraisal mechanics generate the most disputes and should specify whether the land is valued as vacant and unimproved.

Financeability is the central drafting concern. Lenders require: the right to a leasehold mortgage without landlord consent; notice of tenant defaults and an independent right to cure with additional time; the right to a new lease on the same terms if the lease is terminated or rejected in bankruptcy; limits on amendment without lender consent; and no merger of the leasehold and fee estates.

Casualty and condemnation. Who receives proceeds and whether restoration is required; allocation between the fee and leasehold interests in a taking is a recurring negotiation.

Improvements at expiry. Whether they revert to the landlord, and the tenant’s removal or restoration obligations.

Transfer. Assignment rights are typically broad, since the tenant has invested the capital.

Subordination. Whether the landlord will subordinate the fee to leasehold financing is the single most valuable concession a ground lessor can make.