LAND LEASE OPTION
An option in a lease contract, which grants the lessee the right to lengthen the lease period beyond the specified original time frame. Normally, the lessee will be required to pay the premium for this option, usually a small amount every year of the original lease.
The holder of the land lease option can act on favorable future market conditions. Also, the option will let the lessee to extend the cheap lease especially if the future market value is uncertain. For corporations, it can give them a chance to reevaluate its operations before locking themselves into long-term contracts.
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