Lease Land in the Coachella Valley

History of Lease Land in the Coachella Valley:

1876 - The Cahuilla Indians first lived in the Palm Springs area about 2000 years ago. In 1876, the government deeded 640-acre alternating sections to the Southern Pacific Railroad as an incentive for linking Los Angeles with the rest of the country. The non-railroad sections were reserved for the Agua Caliente Indians, a tribe of smaller bands of the original Cahuilla tribe. The Agua Caliente Indian Reservation, comprised of 32,000 acres, extends into the city limits of Palm Springs. With 6,700 acres of partitioned squares, the biggest landowners of Palm Springs real estate are the Aqua Caliente tribe. These acres are laid out in a checkerboard fashion across Palm Springs, Cathedral City, and parts of Rancho Mirage.


1959 - Initially, the Agua Caliente tribe could not sell or lease their land thus rendering it practically useless compared to adjacent non-Indian fee land. Beginning in 1959, President Dwight D. Eisenhower signed the Equalization Law that allowed the tribe to profit from the sale and lease of their reservation property.  After the enactment of the Equalization Law, a profusion of real estate development flourished in Palm Springs.  

The post-war mid century modern era brought an influx of tourists and the advent of air conditioning made staying in Palm Springs a year-round option.  Almost half of Palm Springs is tribal land.  Since 1959, the Agua Caliente tribe has elected to lease their land as a source of revenue for the tribe.  Leases are typically a maximum of 65 years and are extended as the end of the term approaches.

Things to consider when buying on lease land:

Mortgages – Most large national banks won't lend on lease land. However, there are many local Palm Springs mortgage brokers that are very experienced in loans on lease properties. All leases are not the same, as some have different requirements for minimum money down, or other specific considerations.

Length of Lease – The length of the lease is an important consideration when buying on lease land. If you are going to obtain a 30 year mortgage, most lenders will require a minimum of 35 years left on the lease. Knowing when a lease expires is an important consideration. 

Purchase Price – Generally, homes on lease land in Palm Springs are 15-20% less expensive than property on fee land - land you own. That means that your initial down payment and mortgage will be less than a comparable fee land home. However, you will have the additional cost of the land lease. Land leases can be from several hundred dollars a month to many thousands of dollars. 


Lease Renewals - When a land lease gets close to having 30 years left, extensions are usually negotiated. When a lease extension is negotiated, there is usually an up-front fee for the new lease, and the new lease typically has an escalation fee tied into the consumer price index, much like an adjustable rate mortgage. Like an adjustable rate mortgage, there are usually certain intervals and limits on when and how the lease can escalate.


Lease Land Agents - Every agent at Zapala Meyer California Properties is familiar with all the details of lease land properties, and can guide you through the process. Many of our agents even own properties on lease land and have the hands on experience you need.