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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 118772
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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I am interested in a condo in Florida. This will be a 99

Customer Question

I am interested in a condo in Florida. This will be a 99 year lease. What are the pros and cons re this type of deal. How should the deal be structured? My sense is a market price is agreed upon and the sum is paid at the start. After that I would be responsible
for taxes, condo fees. Or is it best to pay an annual rent??? Alan
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 2 years ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
Generally, if there is a 99 year lease, the tenants would pay the taxes and condo fees and a monthly amount in rent all as one payment. Typically they do not pay an annual rent fee, just a monthly rent including taxes and condo fees. This is a tax game in FL.
The 98-year lease technique in conjunction with an expiring Qualified Personal Residence Trust generally works as follows: The client enters into a 98-year lease prior to the expiration of the QPRT term and records that lease. This is based on F.S. §196.041(1) which states, in relevant part:
essees owning the leasehold interest in a bona fide lease having an original term of 98 years or more in a residential parcel or in a condominium parcel . . . shall be deemed to have legal or beneficial and equitable title to said property.
So the party transferring the lease to you retains the homestead and benefits. You get to pay whatever taxes and fees are due plus rent, essentially. See: Higgs v. Warrick, 994 So. 2d 492 (Fla. 3rd Dist. Ct. App. 2008)