Fee Simple vs. Lease Land – What’s the Difference?


In the Greater Palm Springs area, part of the Coachella Valley, you’ll find homes, including those in condominium and country club communities, on both Fee Simple land (land that you own) and Lease land (Indian or Developer leases). Most Lease land properties are in located in the cities of Palm Springs and Rancho Mirage.


When you look at listings, Fee Simple is often abbreviated to Fee land.  This can be confusing because you own the land but it sounds like you have to pay a fee.  Think of Lease land like you own the structure but are merely renting the land on which it resides.  Most leases are either paid monthly or annually and generally average around $125. monthly, depending on a number of variables.  Property taxes are charged for both Fee Simple and Lease land.  For more information about the differences see http://www.octitle.com/pdf/leaselandvs.pdf .


There are also some limitations on the number of Financial Institutions who will finance loans on leased land.  The general rule is that the land lease must exceed the term of the loan by at least five years.  Lease land may also limit the pool of potential Buyers for resale.


Gated vs. Non-Gated – Which one is best for you?


Gated communities may provide a lot of benefits to the residents who live within them, however they may also be too restrictive for some.  Some of the most common elements to these communities are outlined below.


Privacy and Security

The number one reason people choose these communities is because   they are more difficult to access than a standard community.  This can provide peace of mind to homeowners,   especially to those who are absent for extended periods.


Criminal activity may be reduced in gated communities, and   solicitors may have a more difficult (if not impossible) time bothering   residents.


Quieter and Safer

Traffic speed and the noise from vehicles is reduced, making it   quieter and safer.


Higher Home Values

Homeowners in these   neighborhoods also generally have a higher pride of ownership, and keep their   homes in good condition.


Another positive   aspect of gated communities is a higher standard of home quality, and   stricter building codes that promote uniformity in design. That means more   comparable sales and better value for all the homeowners within the   community.


There may also be   social benefits, such as a having a community center or events that promote   group activities for families to get to know each other.


Higher Costs

Along with the higher home values come additional expenses to   cover the amenities. Also, most roads are deemed private, so the HOA may have   to foot the bill to fix those potholes or repave a bumpy road.


Access Delays or Difficulties

Visitors and contractors may get aggravated waiting in line to   come to your home. This occurs more frequently at guard-gated or controlled entrances.


More Controls on Access To and Use Of   Property

Many gated communities limit the time contractors can come   work at your home, and may block them altogether on holidays.


Changes to the property exterior may require Board approval.


HOA Dues


Homeowners Association (HOA) fees are funds that are collected from homeowners in a condominium complex to obtain the income needed to pay operational expenses.  Most HOAs hire a property management company to manage these expenses and ongoing operations.


HOA fees typically cover master insurance, exterior maintenance, landscaping, water, sewer, and garbage disposal costs.  The Homeowner may still want to purchase “walls-in” or Earthquake insurance.  Fees are normally set by the HOA’s board of directors and adjusted annually.  Any excess HOA fees that exist after paying ongoing expenses are stored in an account and called Reserve Funds.  One thing to watch for is whether the HOA charges a reinstatement penalty when delinquent (for a prolonged period) as these can amount to thousands of dollars.




Many communities offer a number of amenities.  Typically the more amenities a community has, the higher the HOA costs.  Some of the fees could be mandatory but some could be optional, depending on which amenities a resident would like to enjoy. 


Average monthly HOA costs range from $125. for a card or code/transponder (not guard-gated) access community, with common landscaping, the other extreme of $900. for communities with a golf course (membership extra), clubhouse and community pools/spas.   Here is a list of some of the more common amenities:



Sometimes   there is an additional fee for access to and use of a Clubhouse.


Concierge   service

This may   be an optional service.


Dining   / Restaurant

Food   & beverage minimums may be applied.



Guard   gated communities generally cost more however may also provide a greater   control over access into the area.


Fitness   facilities

Use may   require an additional fee/membership.



Most   golf communities require the purchase of an additional golf membership or   user-pay system.  There may also be a   membership transfer fee applied.


Swimming   pools /spas

Some   communities do not heat all or any of the pools during winter as a cost   savings.


Tennis/Racquet   Sports

There is   sometimes an additional fee for membership or user-pay.


There are also different amenities available to residents of many of the Desert Cities, such as highly discounted golf fees.

What’s Next…I’m ready to buy?

 Check out our Buying tab at www.Desert-Dreamhomes.com or contact Laurie or Tim at 760-218-6893 for more information.