Land lease is one of the financial arrangements in which a portion of the ground under a structure is leased rather than being sold to the builder. This indicates that the land and the structures are owned independently. There are different reasons to enter a land lease contract but it is important to note that it occurs most commonly with the real estate investor who wishes to retain the entire piece of land but does not possess the adequate energy to develop it.

In this case it is important to note the fact that the investor will work with the developer for the creation of a land lease contract, thus allowing the developer to build the structure, rent it or either sell it. It is important to understand the fact that this kind of arrangement is more common with the urban areas and it is often associated with the co-operatives or the tenant owned buildings.