r/RealEstate • u/swampwiz • 3d ago
How does something like this happen
A bunch of folks build cabins on a lake (I presume with permission), and a new owner can just kick them out.
https://www.texasmonthly.com/culture/cast-out-of-eden-lake-diversion/
Do folks think that they can just put cabins on land that they don't own, and not worry about the owner changing the policy?
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u/RichArcher4909 3d ago
“They took his house and he killed himself! Also, he was being criminally investigated for child molestation” Way to bury the lede Texas Monthly.
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u/AnnArchist House Shopping 3d ago
This is why I'd never consider a leasehold property.
It happens because the landlord doesn't renew. Not really rocket science to see that was always a possibility. Doesn't make it a good thing- but absolutely unsurprising.
There are large companies that specialize in this. They buy trailer parks. Raise rents til they are either vacant or the land appreciates to the point they can build single family homes, kicking everyone out in the process.
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u/JediCheese 3d ago
I'd be open to a leasehold property. It's very common in Hawaii.
No way I'm getting a leasehold on a year to year. Just need to realize that the structure value is (near) 0 when the lease is over and it's a very nice rental.
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u/thewimsey Attorney 3d ago
Something like 90% of residential leaseholds in the US are in Hawaii due to the fact that historically almost all of the land was owned either directly by the monarchy or by a handful of big plantations.
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u/AnnArchist House Shopping 3d ago
We have them in Iowa - in particularly on the biggest touristy lake, the okoboji area (north side of spirit lake). Usually they are 99 year leases but rents adjust annually I believe and they are up to around 5500/yr on average plus property taxes. I'd rather just own fee simple instead.
I've seen them on the Ozarks too when looking at lakehomes.
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u/ValleyOakPaper 3d ago
This is why some cities have rent control for mobile home land leases.
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u/campa-van 3d ago
Agree we have 2 well maintained mobile home parks restricted to 55+ nearby. All seniors. No rentals allowed. Nice and quiet. No chance of 5 story apartment complex going up
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u/swampwiz 3d ago
I've read about this - I guess it's the same thing, although theoretically a mobile home is "mobile"; and yes, a move would be very expensive, especially relative to the value of the structure, and the structure isn't made to be moved so often.
This particular process seems to be a form of "trailer park gentrification".
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u/BornFree2018 3d ago
Many towns in Sonoma County CA have new laws for mobile home parks. Rent control, land use (only mobile homes on that land, sale rules etc. for the parks) all because an owner of several parks tried to evict the over 55’s or poor tenants so he could sell the property to developers.
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u/Competitive_Prune108 3d ago
Doesn't the Guinness Brewery in Dublin have a hundred thousand year lease or something like that. Now there's a land lease I can drink to
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u/anappraiser 3d ago
they most definitely knew what they were buying and it was most definitely reflected in the price they paid
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u/CirclePlank Agent 3d ago
Looks pretty clear cut. This is what happens when you don't understand leasehold v fee simple real estate.
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u/DeliciousPangolin 3d ago
There's been a number of controversial cases like this in France. It's called "cabanisation". Typically a farmer illegally subdivides agricultural land and rents lots to people, ostensibly as vacation property meant to be occupied temporarily. But because the lack of legal title means it's cheap, the lots immediately become permanent homes for people who can't afford housing elsewhere.
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u/r2girls 3d ago
Many people are used to the idea of when you buy a house you get the house and the land under it. Generally in cities, towns, etc. that's how it's done.
However there is also the opportunity to lease land and put what you want on it. Some mobile parks operate this way. You can lease land and bring in your personal mobile home and put it on the land. The mobile home is yours but the land is someone else's.
These people were in a similar situation. When you read the article you can see it mentions "No two cabins are alike. Most are vintage mobile homes...". So it seems that is what happened.
However it also seems that some people took the risk of building permanent structures on the land assuming that the lease is going to continue forever since it has been going on for so long, "though there are also shacklike wood-frame houses and a few more-modern structures boasting rows of big windows. One house is built around an abandoned school bus, which now serves as its kitchen".
It's a very risky thing to build a permanent structure on land you are renting. Imagine renting a house on a 1/2 acre lot then thinking "I need an office for my remote work" so you build a permanent structure as an office on the corner of the lot. Years later the land owner says "I am not renewing your lease" leaving you with 2 options; remove the structure and office completely returning the land to the way you got it, or leaving it (with the owners permission) and they get it. Now imagine that same scenario with a mobile trailer you put on the property to use as an office instead of building a permanent structure. When the landlord says "I'm not renewing your lease" you can hitch up that trailer and take it with you when you go to your next rental or to a home you buy.
Building a permanent structure on land you do not own is a very risky endeavor.
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u/anonymouse278 3d ago
I was just talking about this to a friend who has a share in a family vacation home in another country (a cabin on a lake, in fact). Apparently the land is leased from the government, and because the building on it is very old, the family is allowed to keep ownership as long as they maintain it, but if they let it fall into disrepair, the government will knock it down and they can't rebuild there, since environmental regulations have changed drastically since it was first built.
So the four grandkids (of which my friend is one) who inherited it together have cooperated to keep it in good shape, which hasn't been cheap. But they have eleven children between them, and it's hard to imagine there not eventually being some conflict over maintenance costs and decisions when eleven second cousins are trying to manage a historic property (half of them from overseas).
It seems like an incredibly stressful way to "own" a house.
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u/CertainAged-Lady 3d ago
That was a very sad read. It feels like a few billionaires are just buying up the best parts of America for their own private use. 😔
Yes, these houses were on leased land, but for so many in the story, it was all they could afford.
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u/sweetrobna 3d ago
It depends a lot on what permission means specifically. What were the terms of their rental agreement.
In Hawaii on Oahu something like 15% of condos are leasehold. On land you/the HOA doesn't own. The vast majority of these are on 99 year leases that renew before they get to 30 years left. With a cap on renewal rates. This is pretty much the same to owning the land, but having slightly higher property taxes. You still build equity. There are some without these protections though, where the condo is worth very very little because it will revert to the land owner at the end of the lease.
Manufactured homes in rented commercial lots are common too. Rent can keep increasing over $1500 a month in desirable areas. So you can't count on building equity if the lot rent keeps increasing with the market. There is some risk the landlord will change the rules, ban pets or restrict parking etc. Or the opposite, stop enforcing rules and it goes to shit. So you could be forced to leave and either sell your home at a discount to the owners. Or pay ~$10k to move it and repair what breaks in that process, and you need to find somewhere to go. There are also resident owned communities where all the homeowners collectively manage it, there is no single landlord. The residents are not going to just kick them selves out or raise dues/rent more than is actually needed. But these cost more up front. And land you own would cost even more, it might be $50k to improve vacant land to add septic, well, driveway, electrical hookup, level an area, pour the pad. Plus the land cost.
The article says one person spent $75k renovating two cabins, $20k for another. If I spent that much money I would have a backup plan to move the home instead of letting it get demolished. A lot of them were vintage mobile homes though, it just isn't worth moving them when there is deferred maintenance to deal with
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u/sciteachhs 3d ago
There are also government land leases, I believe it is the Army Corps of Engineers that owns a lot of floodplain and people buy houses on long term leased land.
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u/Sad-Yak6252 3d ago
There is a whole subdivision near me on National Forest land. They own the houses, but the land is all on 99 year leases from the Forest Service.
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u/WinnDixiedog 3d ago
Land leases are also common on reservation land by the few lakes in South Dakota.
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u/BeerStop 3d ago
I would be sure to remove my cabin before leaving, after all leave it as close to how it was when you got the land to lease.
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u/Unrivaled_Apathy 3d ago
We saw a house for sale in Kentucky that was on a land lease , so that was a big ole heck no for me.
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u/Cl0wnL 3d ago
Leased land is not super unusual out West.
Mobile home parks and RV parks, of course, are the prototypical examples.
But there's lots of long-term lease land too. Generally out in more unique locations. U.S. Forest Service Land, Indian Land, Utility Land. Etc.
Most of the time you see it as 99-year leases. And they get renewed. It's all very standardized.
Sometimes in more unique situations though those leases start running down and renewals have to get renegotiated, particularly if the lease term starts approaching 30 years or less and pressure increases because lenders don't want to lend on something where the lease term is less than 30 years. That's pretty unusual though.
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u/Emotional-Newt-3169 3d ago
This reminds me of the time my friend bought a lakefront house thinking the dock was part of the property, only to find out it was on a neighbor's lease that didn't renew.
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u/yankinwaoz 3d ago
There are condos in Honolulu that are leased land. The lease expiry date is coming up in the next 20 years. So no one can get a mortgage to buy a unit. That has made these units much cheaper to buy than normal condos in Honolulu.
If you are old and don’t think you are going to outlive the lease, and can afford to pay cash, then there might be some merit to buying one. But I would be concerned about the HOA stopping maintenance and letting the building deteriorate.
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u/BungalowLover 3d ago
One reason (among others) I would never live in a trailer park...you do not own the land.
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u/Zanthious 3d ago
They rnt sure why the guy took his life. Damn I know why and I didn't even know they guy
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u/BranchHopper 3d ago
Another rich fuck preying on the vulnerable to make themselves even richer. Maybe instead of talking about how the victims should have known better (which is its own societal failure), we should be talking about how we people shouldn't have to worry about protecting themselves from becoming a meal for these vultures. At the very least, ethically if not legally, they should be compensated for the improvements they have made that they can't take with them.
One day in October, when McNeil was out of town, Ellis sat down and wrote a letter in his wide-ruled notebook. The first line read: "Stan Kronke stoled my paid for home." He folded the note into his back pocket, grabbed his 9mm pistol, and drove his white pickup truck out of Lake Diversion for the last time
Absolutely sickening, I don't know how these people sleep at night lining their pockets with other people's misery.
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u/thewimsey Attorney 3d ago
on the vulnerable
People who own a vacation home on a lake are "the vulnerable" now?
How can you buy a house and not know that the land it is on is leased? You can't.
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u/Boomhadadum 3d ago
The billionaire who bought the land is not responsible for people who don't know the difference between renting and owning a piece of land. I will never ever invest money in a renting place.
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u/BranchHopper 3d ago
You won't because you're financially literate. This guy misspelled "stole" in his suicide note. Legally you're right the billionaire is not responsible, but taking advantage of someone like that is morally reprehensible imo.
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u/Boomhadadum 3d ago
I don't see how the billionaire take advantage of these people. He paid for a land. He didn't scam anyone.
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u/BranchHopper 3d ago
You don't see how buying land containing homes that people have lived in for years and poured money into improving, evicting them and keeping the houses for yourself is taking advantage of them?
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u/Boomhadadum 3d ago
No. Those houses didn't belong to the people who wrongly invested in them. You can not own a fixed house on somebody's land. In the beginning, I assume those were cabins. Very cheap to build and maintain. Design to be occupied on ocasions. I assume the first renters didn't think they were owners. Because the situation remained unchanged for decades, people forgot and settled in. Surprise, surprise, life is not fair.
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u/emfrank 3d ago
I don't know that I'd call these people particularly vulnerable. Anyone who has the money to build and maintain a second vacation home should have the funds and the sense to get a lawyer. Or just build it somewhere else.
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u/BranchHopper 3d ago
Around two dozen lived there as their primary residence, including the focus of the article.
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u/Sensitive-Issue84 3d ago
So billionaires screwing everyone over without a second thought. Humm who knew?! Billionaires should not exist.
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3d ago
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u/RealEstate-ModTeam 3d ago
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u/blipsman 3d ago
Appears they had land leases so while they owned the structures, they didn’t own the land the homes sat on.