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Ground Lease

Understand ground leases in Canadian real estate — what they are, how they work, and their advantages for landlords and tenants.

Ground Lease

August 08, 2025


What is a Ground Lease?

A ground lease is a long-term lease agreement in which a tenant leases the land from a landlord but owns and is responsible for any improvements made on it.

Why Ground Leases Matter in Real Estate

In Canadian commercial real estate, ground leases allow tenants to develop property without purchasing the land.



Key points:
  • Terms often range from 20 to 99 years
  • Improvements typically revert to the landowner at lease end
  • Provides stable, long-term income for landlords



Understanding ground leases helps tenants and landlords align long-term investment goals.

Example of a Ground Lease in Action

The retailer entered a 50-year ground lease to build a flagship store on the leased land.

Key Takeaways

  • Long-term lease of land, not buildings
  • Tenant owns improvements during lease term
  • Often reverts improvements to landlord at lease end
  • Provides landlords with steady income
  • Popular for commercial and institutional projects

Related Terms

Additional Terms

Public Realm Improvements

Public realm improvements are enhancements to public spaces such as sidewalks, parks, plazas, and streetscapes, often funded or contributed by. more

Mortgagee in Possession

A mortgagee in possession is a lender who takes control of a property after borrower default, but before foreclosure or power of sale. The lender. more

Lease Surrender Agreement

A lease surrender agreement is a negotiated contract between a landlord and tenant that ends a lease before its scheduled expiration. Terms may. more

Green Infrastructure

Green infrastructure refers to natural or engineered systems that manage stormwater, reduce heat, and improve sustainability in developments.. more

Escrow Holdback

An escrow holdback is a portion of funds withheld at closing and held in escrow until specific conditions are met, such as completion of repairs,. more

Underused Housing Tax

The Underused Housing Tax (UHT) is a federal annual 1% tax on the value of vacant or underused residential property owned by non-resident,. more

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