The Diamond State Community Land Trust offers permanently affordable homes. This is done by separating the land from the “improvements” (the home), and holding the land in trust for the community. The home is very affordable when the home owner purchases and remains affordable upon resale, as the home owner has agreed to share the equity of the resale with DSCLT.
Ground Lease 101
The Ground Lease governs the terms of home ownership in a community land trust. It creates a leasehold form of home ownership. Some of the main aspects of the ground lease are summarized below.
- Article 3 – Duration of Lease – the lease is for 99 years from the day of purchase. At the end of that term, the home owner will be offered an opportunity to renew for another 99 year term.
- Article 4.4 – Occupancy – The home owner and family must occupy the DSCLT home as the primary residence. If there is going to be an absence of 3 or more weeks – the home owner must contact the CLT. Subletting of the home is not permitted without written approval by DSCLT (and is only done in exceptional circumstances).
- Article 5.1 – Ground Lease Fees – The home owner pays a fee directly to DSCLT or through the monthly mortgage payment. If the home owner is having financial difficulties and is unable to pay this fee, it is best to contact DSCLT immediately to prevent the situation getting worse.
- Article 6 – Property Taxes – All the taxes (both land and improvements) are the responsibility of leaseholder. Typically this is paid as part of the monthly mortgage payment. If the home owner receives a tax bill or communication about taxes which is confusing, it is best to contact DSCLT to discuss it.
- Article 7.3 – Construction and Alteration – The home owner is permitted to make improvements to the home. The cost of the improvements is the responsibility of the home owner and must be done in a “workerlike” manner according to local laws, ordinances, and regulations If the improvements will require a building permit, the home owner should contact DSCLT during planning stages to obtain DSCLT concurrence.
- Article 7.5 – Maintenance Services – The maintenance of the home is completely the responsibility of the home owner. If the home owner needs assistance financially to maintain the home, it is best to contact DSCLT, as we may have options to help – including our Matched Savings Plan.
- Article 8 – Financing your Home – The current mortgage on the home must meet certain “permitted” conditions (to protect both the home owner and DSCLT). A home owner who is planning to refinance (or seek a home equity loan), should contact DSCLT to discuss prior to starting the process.
- Article 9 – Homeowner’s Insurance –The initial policy is coordinated with the insurance agent of the home owner and DSCLT to meet the lease requirements. A home owner who is planning to change insurance or agents, needs to contact DSCLT for assistance in coordinating those new changes.
- Article 10 – Transfer/Sale of Home – to achieve the mission and our mutual goal of permanent affordability, transfers and sales are to be made to another qualified income eligible households. A home owner considering the sale of the home needs to contact DSCLT early in process. Resale option prices can be estimated to assist the home owner in the decision making process.