building lease

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A lease under which the tenant covenants to erect specified buildings on the land. Sometimes the lease only begins when the buildings have been erected. At the end of the lease the buildings generally become the property of the landlord. It used to be common for residential property to be built under a building lease, usually for 99 years, under which the landlord would let to a builder at a rent that ignored the value of the buildings (ground rent), and the builder would sell the lease to a tenant. Under a lease of this kind, the tenant may acquire a statutory right to purchase the freehold under the Leasehold Reform Act 1967.

Subjects: Law.

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