Posted by John Merchant on November 22, 2002 at 21:54:16:
Take this to a good business/real estate lawyer and hire him/her to handle the thing for you.
There are a lot of issues to be faced with a purchase like this, and I’ve seen some done well and some done extremely poorly.
Re poorly-done, case in point: A non-profit bought 10 acres on a nice little suburban lake in the 50’s, then promptly proceeded to give its members 50 year (!) leases on lots within their acreage, at peanut rental rates. Fixed rates! And some of these leases weren’t done until the 70’s, so a number have lots of years left on them.
Now the association wants out, and has tried to sell the ground, because it’s now on potentially very valuable property, now well inside major metropolis.
But no buyer is willing to deal with the remaining multi-year, peanut rental rates, because any buyer would basically have to outwait ALL the lease terms in order to put this property to maximum, and highest and best use.
So I’d advise good legal counsel beginning right now, so the group buys this right and manages it right, so as NOT to get in a box like my example.