Before You Buy in Marina del Rey, Find Out Who Owns the Land

Marina del Rey is unincorporated Los Angeles County, and a great deal of the land is owned by the County and leased to private parties through long term ground leases. That is not a technicality. It changes what you own, what you pay monthly, how you finance it, and what happens when you sell.

Fee simple versus leasehold

If a condo is fee simple, you own your unit and an undivided interest in the common areas. There is no ground lease. Your monthly costs are mortgage, property tax, HOA and insurance.

If a condo is leasehold, you own the right to occupy your unit for the remaining term of a ground lease on land somebody else owns. You pay ground rent on top of your HOA dues, and the lease has an end date.

Both exist in Marina del Rey. Two buildings across the street from each other can be different.

Why the remaining term is the whole game

Marina City Club is the best known example. Units there are generally sold as leasehold interests on County land, and the master ground lease is commonly cited as running to 2067.

Do the arithmetic. A thirty year loan written today matures after that date. Fannie Mae generally requires that a ground lease extend beyond the maturity of the loan, often by at least five years. As the remaining term shrinks, the number of lenders who will write on the building shrinks with it, the buyer pool narrows, and price follows.

That does not make leasehold a bad buy. It makes it a different buy, with a different holding period and a different exit.

What I do on any Marina del Rey offer

I get written confirmation from the title officer of whether the property is fee simple or leasehold. If it is leasehold I get the full ground lease with every amendment, the remaining term, and the rent reset schedule. Then I get a lender to look at the lease before we are in escrow, not during.

I have seen buyers get deep into a transaction on a leasehold unit before anyone raised financing, and by then the deposit is at risk.

The rest of it

Marina del Rey has the largest man-made small craft harbor in the country and it is built around that. If you have a boat, or you want to walk to one, there is nowhere else in Los Angeles like it. The newer towers have full amenities and dues to match. The older buildings from the seventies and eighties are less expensive per square foot and are where most of the lease questions come up.

Prices generally sit between Playa del Rey and Venice, which is about where you would expect.

One sentence to remember

Ask the question before you tour, not after you write. It takes one phone call and it determines everything else.

Call me at (310) 861-3459.