An Indian land lease on the Agua Caliente Indian Reservation is a contract between the Indian Landowner and the lessee. The landowner conveys the right to use and occupy the property in exchange for rent. The Agua Caliente Indian Reservation encompasses approximately 28,000 acres of land in the western Coachella Valley, including portions of Palm Springs, Cathedral City, Rancho Mirage, and unincorporated areas of Riverside County. There are 1,175 commercial leases, 7,671 residential subleases and 11,118 time-shares on Indian land leases under the jurisdiction of the Bureau of Indian Affairs-Palm Springs Agency. An Indian land lease on the Agua Caliente Indian Reservation may be negotiated for any period of time but may not exceed 99 years. It all began in 1876, when the Pacific Railroad laid the tracks between Los Angeles and Yuma, AZ The U.S. government deeded the Agua Caliente this land throughout the Coachella Valley. The government gave the railroad a checkerboard of every square mile of land for 10 miles on either side of the railroad right-of-way. Today, most Indian leases are administrated by the Bureau of Indian Affairs; a homeowner doesn’t deal with the Indian owners directly, but instead usually with the appointed property management company or Bureau of Indian Affairs office.

 Mortgages are available on lease land. Some leases do have minimal down payment requirements and other specific conditions, however it is possible to get a loan on lease land. Interests rates tend to be the same for Lease and Fee Simple land. However, I recommend using a local Palm Springs area lender that is familiar with leased land. The price of the lease can vary depending on the property, and subject to change. Some lease payments are paid annually; others are divided and paid monthly. Each lease is unique and should be reviewed for the specific terms affecting a particular property. The difference between buying land and leasing it is that lease land reduces the cost of a home by 20 to 30% on average. So essentially the homeowner gets the use of the land without the capital outlay – and can afford a far more luxurious home for less money.

Due to the price difference, the amount of the property taxes can be less then fee land as you are typically only paying taxes based on the purchase price of the structure, not the land. This of course is not guaranteed, however. You should research the tax information with the county of Riverside Tax Assessor.

Many people ask; what happens at the end of my lease? Since there is no legal restriction prohibiting the Lease Holder (Indian tribe) from selling their land, you or your heirs may have the option to purchase if you wish to do so. However, most probably, you would be offered a new lease based on conditions existing at that time and there may be large fees involved so make sure you are aware of those cost ahead of time.

 

Things to Consider

If you think that buying a property on leased land may be right for you, you should consider the following:

- How much time is remaining on the lease? If the length of the remaining lease is shorter than you plan to remain in the home, it is VERY important to find out what happens to your interest in the property at the end of the land lease term. The lease term will also affect your ability to finance the home. It may be difficult or impossible to get a mortgage if the remaining lease term on the land is 20 years and you want a 30- year mortgage.

- How much is the monthly land lease payment and most important, what is the FEE to renegotiate the lease when the time comes? You want to make sure that you really will be saving money by buying a leased-land property.

- What are the terms of the surrender clause? Check the terms of the surrender clause if the lease will run out while you still own the house.

If you would like to learn more about the Indian lease land, please contact: Bureau of Indian Affairs 3700A Tachevah Drive, Suite 201 (2nd Floor) Palm Springs, CA 92262 Telephone: (760) 416-2133 Fax: (760) 416-2687