Since the "company" model has become less attractive, the leasehold model has instead gained increasing popularity. Today, most housing projects use a leasehold solution where the buyer of a property leases the land for 30 years from the development company. When the lease period expires, the owner of the property has the option to extend the lease for another 30 years. This can be done twice, which implies that the total lease period, in principle, can be 90 years.
However, the lease period is far more complicated than what is often communicated to the buyer. Among the potential complications can be mentioned the bankruptcy risk of the developer, the risk of the developer mortgaging the land, and the fact that the developer can reject extending the lease period. To put it clear: in most cases, it is only the first 30 years that can be guaranteed. Nevertheless, there are ways also around this issue, where a professional business lawyer is the best way forward.
