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

What is the primary role of a lessor in a ground lease?

1. To construct a building

2. To lease land only

3. To manage the property

4. To sell the property

The correct answer is: To lease land only

The primary role of a lessor in a ground lease is to lease land only, which is accurately captured in the chosen response. In a ground lease, the lessor (the landowner) provides the right for a lessee (the tenant) to use the land for an extended period, usually 50 years or more, without transferring ownership of the land itself. This arrangement allows the tenant to use the land to develop or construct their own building or improvements while the ownership of the land remains with the lessor. The lessee may invest in substantial improvements on the property, but those improvements typically revert to the lessor when the lease term expires. Therefore, the focus of a ground lease is singularly on the leasing of land, making the chosen answer the most accurate portrayal of the lessor's primary role. In contrast, constructing a building, managing the property, or selling the property are roles that pertain more to the lessee or other parties involved in the real estate transaction, and not to the lessor in the context of a ground lease.