Question

Long-term leases of 40–50 years

Is it possible to enter into 40- to 50-year lease agreements if, for example, a customer wants to construct a building and seeks long-term security? 

Unless the property is a separate parcel, lease agreements cannot be entered into for a term exceeding 30 years. This is provided for in the Land Subdivision Act. 

If you subdivide the property, you can, in principle, lease it out for 100 years. 

However, it is possible to draw up lease agreements with a 30-year rolling notice period (without subdivision), which is not unusual in this type of case. This provides the tenant with a reasonable degree of security. 

Mortgage lenders typically require a loan term of 20 to 30 years in order to grant a loan.