Thinking about a Marina del Rey condo and keep seeing “land lease” in the fine print? You are not alone. Many waterfront buildings here sit on county-owned land, which changes how you buy, finance, budget, and plan for resale. In this guide, you will learn what leasehold and fee simple really mean in Marina del Rey, what to watch in the documents, and how to make a confident decision for your goals. Let’s dive in.
Why Marina del Rey has leaseholds
Much of Marina del Rey’s waterfront lies on tidelands and harbor property managed by Los Angeles County. The county historically issued long-term ground leases to developers who built the residential communities you see today. Individual owners typically hold title to their condo unit and an interest in the common areas, but not the land beneath the building.
In many buildings, the homeowners association is the tenant under the county ground lease. The HOA pays ground rent and passes that cost to owners through dues or fees. This setup affects financing, monthly costs, and resale planning, so it is important to understand how the lease works in the community you are considering.
Fee simple vs leasehold basics
What fee simple means
With fee simple, you own the property and the land beneath it. For condos, you own the unit plus a proportional interest in the land and common areas. There is no separate ground lease or rent owed to a public landlord. Fee simple homes are generally easier for lenders to finance and often involve fewer transfer approvals.
What leasehold means
With a leasehold, you own your condo unit improvements and your rights under the condominium documents, but the land is leased from the county. Your rights are tied to the ground lease that controls terms such as remaining years, rent escalations, and approvals for sales or alterations. The HOA often handles lease obligations and allocates costs to owners, though some communities bill owners directly.
Lease terms to review first
- Remaining lease term and expiration date.
- Renewal or extension options and how they work.
- Ground rent amount and escalation formula.
- Approval requirements for sales, subletting, financing, and alterations.
- What happens to improvements if the lease ends without renewal.
- Any environmental or marine structure maintenance obligations.
Budget impacts: HOA and ground rent
Ground rent is a line item that fee simple buyers do not pay. In many Marina del Rey communities, the HOA pays the county and spreads the cost among owners through dues. In others, owners pay rent directly. Either way, ground rent escalations can raise your monthly costs over time.
Ask for the current rent amount, the escalation schedule, and how those costs are billed. Review the HOA budget, financial statements, and reserve study to see how ground rent is handled and whether any deferred amounts could trigger special assessments.
Taxes and special assessments
Property tax treatment on improvements for leaseholds is broadly similar to fee simple, but assessment calculations can vary based on local practice. Sales and reassessments may affect the leasehold interest and should be reviewed with your title and escrow team. Some projects can also carry obligations tied to harbor or marine infrastructure. Confirm who is responsible for what in the lease and HOA disclosures so you can plan your annual costs accurately.
Financing a leasehold
Lenders focus on remaining lease term and the lease provisions. As the remaining term shortens, financing can become harder and more expensive. Different loan programs set different minimums for how many years must remain on the lease beyond your loan term.
- Conventional lenders often look for a remaining lease term that exceeds the loan term by a cushion of years. Standards vary, so confirm with your lender.
- FHA and VA loans apply strict rules to leaseholds and may not be available for certain buildings.
- Portfolio lenders can be more flexible, but pricing may reflect the added risk.
Before you write an offer, get pre-approval that specifically references the building and lease. Ask your lender about any term cutoffs and whether rate or program changes apply if the remaining lease is below certain thresholds.
Valuation and resale
Appraisers consider lease terms when valuing Marina del Rey condos. Units with shorter remaining lease terms can appraise lower because the buyer pool shrinks when lenders avoid those leases. As leases approach informal market thresholds, cash buyers may dominate, and days on market can rise.
Some buyers ask about converting leasehold to fee simple. While possible in limited cases, conversion can be complex, expensive, and subject to public trust and tidelands rules. The county may consider selling the underlying fee interest in certain circumstances, but the path, cost, and approvals are uncertain and case specific. Treat conversion as a potential long-term outcome rather than a near-term plan.
Buyer due diligence checklist
Documents to obtain
- Complete recorded ground lease and all amendments.
- Condominium CC&Rs, bylaws, and any lease rider tied to ownership.
- HOA budget, financials, and reserve study showing ground rent treatment.
- County correspondence about the lease, payments, or renegotiation.
- Preliminary title report showing leasehold status and recorded exceptions.
- Any municipal or county disclosures about tidelands or trust-use restrictions.
- Insurance details and who carries what coverage for buildings and improvements.
Questions to ask
- How many years remain on the lease, and what is the exact expiration date?
- Are there renewal or extension options, and who must exercise them?
- What is the current ground rent, how does it escalate, and who pays it?
- Are negotiations with the county underway that could change terms or costs?
- Has the county withheld consent for transfers, alterations, or financing in the past?
- Are there any lease defaults, environmental issues, claims, or litigation?
Financing checklist
- Confirm your lender’s minimum remaining lease term for this building.
- If using FHA or VA, verify that the specific lease and project qualify.
- Ask about refinancing risks as the remaining term shortens during your loan.
Resale planning
- Compare recent leasehold sales in the same or similar buildings with nearby fee simple waterfront sales.
- Understand your likely buyer pool and how lease term could affect demand and pricing.
- Prepare to disclose lease documents and escalation schedules to future buyers early.
Which option fits you
Choose fee simple if you want straightforward ownership, simpler financing, and fewer moving parts. This path often suits buyers who plan to hold long term and want maximum flexibility on refinancing or resale.
Choose leasehold if location and lifestyle outweigh lease risks for you. Many buyers accept leaseholds to live closer to the water in Marina del Rey. The key is to price in lease terms, ground rent escalations, and future financing constraints, and to verify the details before you commit.
Work with a local team
You deserve clear answers and a purchase plan that fits your timeline and budget. A local team that knows Marina del Rey’s leaseholds can help you read the documents, understand HOA budgets, and negotiate with confidence. If you are selling, a targeted marketing plan and transparent disclosures help protect your price and reduce friction with buyers and lenders.
Ready to compare specific buildings and terms? Reach out to The Suarez Team for a focused plan that aligns with your goals.
FAQs
Can I get a mortgage on a Marina del Rey leasehold condo?
- Often yes, but it depends on the remaining lease term and your lender’s program rules. Get written pre-approval that names the building and confirms lease acceptance.
How do ground rent escalations affect my monthly costs?
- Ground rent increases flow through to owners via HOA dues or direct billing. Review the escalation schedule so you can budget for expected increases over time.
What happens when the county ground lease expires?
- It depends on the lease. Some leases allow renewal, others require renegotiation, and some permit the county to take possession. Always verify the exact terms.
Are FHA or VA loans available for leasehold condos here?
- Sometimes, but these programs apply strict leasehold rules. Confirm early whether the building and lease meet the specific program requirements.
Is converting to fee simple realistic for my building?
- It may be possible in limited cases, but it is often complex, costly, and subject to public trust and tidelands constraints. Treat it as uncertain unless confirmed.
Do leasehold condos always sell for less than fee simple?
- Not always. Waterfront location supports value, but shorter lease terms and financing limits can reduce buyer demand. Price and marketing should reflect the lease profile.
