99-year lease

A 99-year lease was, under historic common law, the longest possible term of a lease of real property. It is no longer the law in most common law jurisdictions today, yet 99-year leases continue to be common as a matter of business practice and conventional wisdom.

The law

Under the traditional American common law doctrine, the 99-year term was not literal, but merely an arbitrary time span beyond the life expectancy of any possible lessee or lessor.[1][2]

William Blackstone states that a lease was formerly limited to 40 years, although much longer leases (for 300 years, or 1000 years) were in use by the time of Edward III.[3] The 40-year limit was based on the unreliable text "The Mirror of Justices" (book 2, chapter 27).

In the law of several US states, a 99-year lease will always be the longest possible contract for realty by statute, but many have enacted shorter terms and some allow infinite terms.[4]

The 99-year lease concept has been more common under the civil law regimes when it comes to concessions of territory: most concessions last for 99 years.

Historic examples

The United Kingdom famously had a 99-year lease, or concession, to Hong Kong New Territories from China from 9 June 1898 to 1 July 1997.[5]

The Lend-Lease program of the 1940 was enabled by 99-year lease of British bases on several islands (Gander International Airport in Newfoundland) by the Destroyers for Bases Agreement.

All land in Canberra and The Australian Capital Territory in Australia is held by tenure under 99-year lease provisions.[6]

The land under the city of Salamanca, New York has been held under 99-year leases. In 1997, The Walt Disney Company purchased a 99-year land lease for a cay from the Bahamian government, set to expire in 2096, giving the company substantial control over the guest experience on the island.

Contemporary examples

The Salvador Dali Museum in St. Petersburg, Florida secured a 99-year lease in 2007.[7]

Highway 407 in Toronto, Ontario was leased to a consortium of investors under a 99-year lease in 1999.

Via Silverstein Properties and Westfield America, Larry Silverstein made a $3.2 billion bid on the World Trade Center in January 2001. Silverstein was outbid by $30 million from Vornado Realty.[8] However, Vornado soon withdrew and the World Trade Center was secured by Silverstein on 24 July 2001. The lease agreement applied to One, Two, Four, and Five World Trade Center, and about 425,000 square feet (39,500 m2) of office space. Upon leasing the properties, Silverstein insured the World Trade Center, and after the 11 September attacks which totally destroyed the property including Six and Seven World Trade Center, Silverstein sought for $7.1 billion (two times the insured price) after the destruction because he interpreted the two plane crashes as "two occurrences".

After Ontario extended full funding to Roman Catholic separate schools in 1986, known as Bill 30, several public school properties have been leased to the separate board for 99 years for a $1 sale with a provincial grant of $500 per pupil place. For example, in the Toronto District School Board: Vincent Massey Collegiate Institute; Humbergrove Secondary School; Kingsmill Secondary School (Etobicoke), West Park Secondary School (Toronto), York Humber High School (York), and Scarborough Centre for Alternative Studies (formerly Tabor Park Vocational School) (Scarborough) are leased to the Toronto Catholic District School Board while Lewis S. Beattie Secondary School (North York) is leased to the Conseil scolaire de district catholique Centre-Sud. At that time, both bilingual boards were the Metropolitan Separate School Board.

See also

References

  1. ↑ Mortgage News Daily web site article on a 99-year lease. Accessed 20 February 2008.
  2. ↑ Cecil Adams, Why are leases made for 99-year terms?, 22 July 1977, found at The Straight Dope article on 99-year lease. Accessed 20 February 2008.
  3. ↑ William Blackstone (1753), Commentaries on the Laws of England, Book 2, Chapter IX "Of estates less than freehold"
  4. ↑ Law Office of James Kaklamanos web site page on 99-year lease. Accessed 20 February 2008.
  5. ↑ "British History Timeline". BBC. 2005. Retrieved 21 February 2008.
  6. ↑ Grants of Leases linked from the ACT Planning & Land Authority.
  7. ↑ Donna Winchester, Dali Museum gets 99-year lease: Its new building will go up on St. Petersburg's downtown waterfront, St. Petersburg Times, 30 November 2007. Found at Dali Museum gets 99-year lease article from St. Petersburg Times. Accessed 20 February 2008.
  8. ↑ http://observer.com/2001/04/silverstein-recovers-dark-horse-may-win-world-trade-center/