7.15.1 Definitions

A. Fee Simple (Estate). An ownership interest in land that is the broadest property interest allowed by law, extending beneath the soil to the air above, and which endures until the last holder dies without heirs.

B. Leasehold (Estate). A Tenant’s possessory interest in land for a term of years granted to the Tenant pursuant to a lease agreement. Upon expiration of the Lease term, all rights to possess and use the land revert back to the Landlord (Fee Simple owner) and the leasehold estate terminates. A leasehold interest can be in the land only (ground lease) or the land and building and improvements.

C. Leased Fee. A Landlord’s interest and rights to the leased property, including the right to receive rental income and a right to possess the property at the end of the lease.

D. Tenant. An entity with a possessory interest in the land granted by the Landlord through a Lease, typically the single asset Borrower entity, i.e ., the HUD Borrower.

E. Landlord. The owner of the Fee Simple interest in the land (and sometimes improvement on the land) who grants the Tenant the temporary possessory interest in the land (and improvements, if applicable).

F. Lease. A contract for exclusive possession of lands or tenements for a determined period. Note that the Lease Addendum – Multifamily (form HUD-92070M)) uses the term Lease to refer to Leasehold Estates comprised of the land (or air) and Improvements, but for purposes of this Section, Lease may refer generally to a lease of land and improvements, a Ground Lease, or an Air Rights Lease.

G. Ground Lease. A particular form of Lease, typically a long-term contract between the Landlord and Tenant granting the Tenant an exclusive possessory interest in land for a term of years in return for lease payments or rent. A Ground Lease for purposes of this Section does not include improvements.

H. Rent or Ground Rent. Money paid by Lessor to Lessee in exchange for the exclusive use and enjoyment of the land or improvements.

I. Improvements: Improvements are a permanent addition to real property (land).