Humber/Ontario Real Estate Course 1 Exam Practice

What is true about a land lease?

1. Can be used for residential developments but not for agriculture

2. Is exclusive to use by individuals but not businesses

3. Cannot be issued by private property owners

4. Cannot exceed 20 years in duration

5. Provides exclusive right to use the leased land

6. Is prohibited by the Crown

The correct answer is: Provides exclusive right to use the leased land

A land lease is a legal agreement where the owner of a piece of property (the lessor) allows another party (the lessee) to use the land for a specific period in exchange for rent or other forms of compensation. The key aspect of a land lease is that it provides the lessee with an exclusive right to use the leased land, which means they can develop, build, or utilize the property within the terms of the lease agreement. This exclusivity is crucial, as it ensures that the lessee has control over how the land is used without interference from the lessor, as long as they adhere to the agreed-upon terms. For instance, in a land lease scenario, a business might lease land to construct a facility. Within the lease's framework, the business has the exclusive right to operate on that land, which allows for the development of a commercial property or residential structure, depending on zoning laws and lease stipulations. This exclusive right is a fundamental characteristic of land leases, differentiating them from other types of agreements, such as licenses, which do not provide exclusive rights. The other options suggest limitations or restrictions that do not apply universally to land leases, such as restrictions on agriculture, business use, or duration, all of