Community Land Trust

Here is another interesting concept in real estate: Community Land Trust. What is it? Well it is a tool used in order to obtain a democratic ownership of a piece of land by the individuals in a local community. Such land is removed from the local market and it gets separated from any productive uses, which eliminates land appreciation as a consequence. This allows an affordable development of the community based in a long term. On a community land trust, the residents and the business owners are responsible for future development.

A CLT is a non-profit organization which is tax-exempt because their resources are based on helping the poor by running charitable activities.

The Community Land Trust model has been present in the USA for the past thirty years and has seeing a slow but steady growth during such period. The first CLT was formed in an effort to provide with secured land to African American farmers back in 1967.

The success of a CLT is based on a dual ownership system with split ownership rights; this works like this: the CLT owns the land, and the home or business owner owns the title to the physical structure within the land. The land is given to the grantee in a lease agreement that can last up to 99 years.

The dual ownership model allows the CLT to have the first word when it comes to property modifications and it allows the CLT to set the future set price of the house, therefore preserving the affordability of such property. A regular lease CLT ground lease contract stipulates the following:
• Limitations on property improvements and limitation on subleasing
• If the lessee wants to sale the property, the CLT has the first choice when it comes to repurchase or when there is a faulty mortgage in the middle.
• And finally, a formula to determine the resale price of the property in question.

A CLT property offers some advantages and some disadvantages, but if you think it is the right thing for you, then jump into the internet and get more informed, or better, visit a local realtor who can give you more in-deep information about it.