What Is a Ground Lease in Marina del Rey, and What Does It Mean If You Buy?

A ground lease means the land under a home belongs to someone else and is leased out for a fixed number of years. In Marina del Rey, that someone is the County of Los Angeles. When you buy into a building on leased land, you are buying the residence and the remaining years on the lease. You are not buying the dirt.

That single difference moves three things: what a lender will agree to do with your loan, what the home is worth compared to a similar one on owned land, and how straightforward it is to sell later. None of those is a reason to walk away from a home you love. They are reasons to know exactly what you are looking at before you write the offer, because the years remaining on the lease drives all three at once.

At First Key Pacific, this is one of the first questions I raise on any Marina purchase. Inland in Mar Vista, it rarely applies. In the Marina it belongs at the top of the list.

Marina del Rey was built as a public small-craft harbor on land held by the County of Los Angeles. Rather than sell those waterfront parcels off, the County leased them to developers under long-term ground leases. Those leases are what much of the housing and commercial space around the water sits on today.

So the ownership runs in layers. The County holds the land. A leaseholder holds a long-term lease on a parcel. A building went up on that parcel, and where it is a condominium, individual homes inside it were sold. Buy one of those homes and you step into a share of that arrangement, with an HOA sitting between you and the lease.

Not every residential property in and around the Marina works this way. Plenty is held in fee, which means the land conveys with the home the same way it does in Del Rey or Playa del Rey. Both structures exist, sometimes within a few blocks of each other. You cannot tell from the curb, and you cannot tell from the listing photos.

Fee simple is what most people picture when they picture owning a home. You own the structure and you own the land under it, indefinitely, subject to your taxes and whatever restrictions are recorded against the property.

Leasehold means you own the improvement and a right to occupy the land for the remaining term of a lease. When the lease term ends, that right ends, and what happens after depends entirely on what the lease document says. Some leases provide a path to extension. Some contemplate renegotiation. Some provide for the improvements to revert to the landowner.

Day to day, living in a leasehold condo feels like living in any other condo. You hold title, you have an HOA, you make a mortgage payment, you pay property taxes. The difference does not turn up in the living. It turns up in the financing, in the price, and on the way out.

Lenders care about one number here above the others: how many years are left on the ground lease compared with the length of the loan you are asking for. A lender writing a thirty-year mortgage wants the lease to outlast that loan by a comfortable margin. The specific requirement varies by lender and by loan program, so this is a question to put to your loan officer in writing, early, about the actual property, before you are emotionally committed to it.

Here is what that looks like in practice. A leasehold home with a long remaining term is financeable through an ordinary loan and an ordinary process. As the remaining term gets shorter, the pool of willing lenders narrows. A smaller pool of lenders means a smaller pool of future buyers, which makes this a resale question as much as a financing question.

Ask at pre-approval, not on day fifteen of escrow. If the answer changes your loan program or your down payment, you want that information while your contingencies are still in place.

A leasehold home generally prices below a comparable property on owned land, and it should. You are buying a defined number of years rather than a permanent interest, and the difference in price is the market putting a number on that.

The part buyers miss is what time does to it. A fee property is a permanent asset. A leasehold interest has a clock running on it, and the clock does not pause while you live there. Buy with many decades left and sell a few years later, and you are selling a shorter term than the one you bought. Whether that matters much depends on how much time remains and on what buyers and lenders think about that number when you go to sell.

Then there is ground rent. Leases of this kind typically provide for the rent to adjust on a schedule, and in a condominium that cost usually flows through the association rather than arriving as a separate bill. So the HOA figure you are quoted today is not automatically the figure three years from now, and the reason may have nothing at all to do with how the association runs its own budget. Read the HOA package with that specifically in mind. My guide to reviewing HOA documents before you buy a condo covers the rest of that review.

Every item on this list is answerable with a document. None of it requires a crystal ball.

• Whether the property is leasehold at all. The preliminary title report is the place this shows up. Ask for it early rather than waiting for it to arrive with everything else.
• Years remaining on the ground lease. One number, and the most consequential one you will collect.
• The current ground rent and the adjustment schedule. How much, how often it resets, and on what basis.
• What the lease says about the end of the term. Extension, renegotiation, reversion. Read the actual language rather than accepting a summary of it.
• How the ground rent reaches you. In a condo, usually through the HOA. Look at the budget and the reserves with that in mind.
• Your lender's written position on this specific address. Not a general answer about leaseholds. This building, this remaining term, this loan program.

A careful read of the full disclosure package matters more here than on a standard purchase, because the lease is what makes this home different from the one down the street. My walkthrough on how to read a California disclosure package is the right companion to this list.

No. It is a different buy, and it should be priced, financed, and planned like one.

For some buyers the math works comfortably. You get a location on the water that would cost meaningfully more on owned land, the remaining term runs well past any horizon you are actually planning for, and the lower price buys you a home you would otherwise be shut out of. That is a real trade, made with open eyes.

For other buyers it does not work, and the reason is usually the time horizon. If the plan is to hold the property for a very long time, or to pass it along, a shrinking term cuts against the plan. That is a conversation to have at the front, not after you have fallen for a view.

What I will not do is let a buyer find out about any of this in week three of escrow. The question gets asked on the first walkthrough of a Marina building, before anybody writes anything.

The honest summary: a ground lease is not a defect and it is not a trap. It is a structure, and one of the few things on the Westside that genuinely changes how a purchase works.

If you are shopping the Marina, or comparing it against the neighborhoods just inland, start with the Marina del Rey neighborhood guide and the breakdown of the three similarly named neighborhoods people mix up constantly. Then bring me the address you are considering and we will pull the title report and read the lease together before you decide anything.

Questions about a specific building, or about whether a home you found is on leased land? Get in touch and we will look at it. No pressure, just real answers.