Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

In a ground lease, who is typically considered the lessor?

1. Tenant

2. Land owner

3. Lessee

4. Contractor

The correct answer is: Land owner

In the context of a ground lease, the lessor is the party that owns the land and grants the lease to another party. This means the land owner, or lessor, allows a tenant to occupy and use the land for a specified period, under the terms of the lease agreement. In this arrangement, the tenant typically pays rent to the land owner for the use of the land, whereas the lessee is another term used interchangeably with the tenant, who is the party leasing the land. The contractor does not have a relevant role in the context of a traditional ground lease setup. Therefore, identifying the land owner as the lessor highlights the critical relationship in a ground lease: where the land is owned by one party and leased to another for development or use, often for long terms that can extend for decades.