An Act Regarding Buildings on Leased Lots (AFTER DEADLINE)
Maine Legislature, Session 122, LD 1646
Committee: Judiciary
Sponsors: CLARK, DAVIS, CARR, PARADIS, PINEAU, RICHARDSON, SHERMAN, WHEELER, EDMONDS, STRIMLING
Amends: 14 MRSA §6047, 14 MRSA §6048, 14 MRSA §6049, 14 MRSA §6049-A, 14 MRSA §6050

Legislative Document 
No. 1646 
H.P.1162 
House of Representatives, May 5, 2005 
An Act Regarding Buildings on Leased Lots 
(AFTER DEADLINE) 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
205. 
Reference to the Committee on Judiciary suggested and ordered printed. 
Presented by Representative CLARK of Millinocket. 
Cosponsored by Senator DAVIS of Piscataquis and 
'711~ /J7·711~ 
Mll...LICENT M. MacFARLAND 
Clerk 
Representatives: CARR of Lincoln, PARADIS of Frenchville, PINEAU of Jay, Speaker 
RICHARDSON of Brunswick, SHERMAN of Hodgdon, WHEELER of Kittery, Senators: 
President EDMONDS of Cumberland, STRIMLING of Cumberland. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 14 MRSA §6047, sub-§I, as repealed and replaced by PL 
2003, c. 510, Pt. A, §12, is amended to read: 
1. 
Parties to agreement; 
purposes of agreement. 
chapter applies to agreements between: 
This 
A. 
A person, referred to in this chapter as the "lessor," 
who owns land in te~~ite~Y-~--}~~~&G~e~i&&-e~-~~-MaiBe 
baBe-Yse-Re~a*atieB-bemmissieR this State; and 
B. 
A person, referred to in this chapter as the "lessee," 
who 
intends 
to 
construct 
or 
to 
occupy 
a 
building 
or 
buildings owned by that person on leased land in ~eFFiteFY 
aBee~---}uc4~~~--9~--~~-~~--~aRe--~--Re~a*atieB 
bemmissieB 
this 
State 
for 
recreational 
or 
residential 
purposes on a seasonal or year-round basis or to operate a 
business 
consisting 
of 
a 
commercial 
sporting 
camp, 
campground or retail store. 
This chapter does not apply to 
a trailer park, 
condominium, 
timeshare or apartment house. 
Sec. 2. 14 MRSA §6048, 
as repealed and replaced by PL 2003, 
c. 510, Pt. A, §12, is amended to read: 
§6048. Written lease and description required 
An agreement described in section 6047 must be made in the 
form of a written lease 
aBe-~-.,i~~-at--1ea&t:--~-~eBel'al 
eeseFiptieB-e'-the-99aBeaFies-e'-~he-*aBe-~e-ge-*easee. 
Before June 1, 2007, a lessor shall prepare a full boundary 
survey Qy a professional land surveyor of all leaseholds in its 
possession and recorda plastic mylar map of this boundary survey 
in the registry of deeds for the county in which the real estate 
is located. 
If a lessor offers to sell the real estate to a lessee for 
its fair market value, as defined by section 6050, prior to June 
1. 2007, then this conveyance is subject to the same exemptions 
and conditions described in sections 6050 A, 
6050-B, 6050-C and 
6050-D. 
The cost of a survey for real estate sold pursuant to this 
section prior to June 1. 2007 must be borne by the lessee, who 
shall choose the surveyor • 
. Page l-LR2269(1) 
A lessor who fails to prepare and record a full boundary 
survey, as required by this section, does not qualify for the 
Maine Tree Growth Tax Law for the municipality in which the 
leasehold is located. 
The cost of a survey for real estate sold pursuant to this 
section after June 1, 2007 must be borne by the lessor, who shall 
choose the surveyor. 
The fee for such a 
survey may not be 
subtracted from the future sale price of said real estate, 
Sec. 3. 14 MRSA §6049, as repealed and replaced by PL 2003, 
c. 510, Pt. A, §12, is repealed. 
Sec. 4. 14 MRSA §6049-A is enacted to read: 
§6049-A. 
Termination 
A lessee may terminate a lease earlier than the effective 
date provided in the lease. 
A lessor may not terminate a lease without just cause and 
the burden of proof is on the lessor to show just cause. 
Termination provisions of a lease to the extent inconsistent 
with this section are void, beginning on the date the notice of 
termination is provided. 
A lessor shall reimburse a lessee for the fair market value 
of all improvements on leased real estate, if the lessee's lease 
is terminated by the lessor. 
Sec. 5. 14 MRSA §6050, as enacted by PL 2003, c. 510, Pt. A, 
§12, is repealed and the following enacted in its place: 
§6050. 
Right of first refusal 
After October 1. 
2005, 
a 
lessee of premises on which a 
structure owned by the lessee exists has the right of first 
refusal for the fair market value of the leasehold with regard to 
the leased premises if the lessor intends to sell any real estate 
in this State. 
The lessor shall give the lessee at least one 
year to accept the offer to purchase the leased premises by 
certified mail, return receipt requested, restricted delivery. 
As 
used in this sectiQn, 
"fair market value" means 
the 
assessment according to the Department of Administrative 
and 
Financial Services, Bureau of Revenue Services in the unorganized 
territory or the assessment by a municipality in an organized 
municipality. 
If a lessee does not elect to purchase the leased premises, 
the lease must continue with the same terms, other than annual 
rental fees, for no less than 50 years with the annual rental fee 
being not more than 5".& of the fair market value of the leased 
premises, excluding improvements. 
The lessor may not impose any 
additional fees and the lessor may not amend any lease in effect 
prior to January 1, 2005 without the consent of the lessee. 
A lessor who violates this section does not gualify for the 
Maine Tree Growth Tax 
Law for the municipality in which the 
leasehold is located. 
All conveyances of real estate by the lessor must be made 
subject to all leases in effect at the time of conveyance. 
All lessors and their successors in interest shall honor all 
leases in effect at the time of any conveyance. 
Sec. 6. 14 MRSA §§6050-A to 6050-F are enacted to read: 
§ti050-A. 
CQPital gains taxation 
For real estate sold pursuant to this chapter prior to 
December 31, 2007, the grantor does not incur capital gains tax 
under the laws of this State if the real estate is sold for its 
fair market value as defined in section 6050. 
§ti050-B. 
Subdivision 
The sale of real estate pursuant to this chapter is exempt 
from the subdivision laws in Title 30-A, sections 4401 to 4406. 
Sti050 C. 
Maine Land Use Regulation Commission 
The sale of real estate pursuant to this chapter is exempt 
from 
the 
laws 
relating 
to 
the 
Maine 
Land 
Use 
Regulation 
Commission, Title 12, chapter 206-A, subchapter 2 and the rules 
of the Maine Land Use Regulation Commission as they relate to the 
conveyance of real estate in the unorganized territory, except 
for subsurface waste disposal issues. 
These lawS and rules apply 
to this real estate following its conveyance. 
Sti050-D. 
Easements 
All real estate conveyed pursuant to this chapter has a 
perpetual easement by necessity from a State-maintained highway, 
no lesS than 16.5 feet in width or its current width, whichever 
is greater. 
Sti050 E. 
Binding arbitration 
. Page 3-LR2269(1) 
All 
boundary 
disputes 
must 
be 
resolved 
in 
binding 
arbitration between the lessor, the lessee and any other parties 
in interest by an arbitrator approved by a national arbitration 
association. 
The fee for this arbitration must be shared equally 
between the lessor, lessee and any other parties in interest. 
The 
arbitrator 
must 
be 
assigned 
by 
a 
national 
arbitration 
association. 
The courts of this State have no jurisdiction over this 
section. and there is no right of appeal. 
§6050-F. 
Minimum lot size 
The minimum lot size for leased premises must be determined 
.as follows. 
The description of the current lease of the leased 
premises must be examined. 
If the description describes leased 
premises that are less than 20,000 square feet and the current 
lessee held the lease prior to the effective date of Title 12, 
section 4807 -A, then the lessee is exempt from the requirements 
of section 4807 -A. 
If there is no description, the boundaries 
are those occupied by the lessee. 
Sec. 7. Application. 
Except as otherwise provided, this Act 
applies to agreements entered into or renewed on or after October 
1, 2005. 
SUMMARY 
This bill changes the laws governing buildings on leased 
land in the following ways. 
1. 
It provides 
that 
these 
laws 
apply 
to 
land 
in 
an 
organized area as well as to land in the unorganized territory. 
2. 
It provides that a lessor may not terminate a lease 
without just cause and that a lessor shall- reimburse a lessee for 
the fair market value of all improvements on the leased real 
estate if the lessor terminates the lease. 
3. 
It provides a lessee with a right of first refusal for 
the fair market value of the leased land with regard to the 
leased premises if the lessor intends to sell any real estate in 
this State. 
If a lessee does not elect to purchase the leased 
premises, the lease continues with the same terms, except for 
annual rental fees, for no less than 50 years. 
The annual rental 
fee is capped at 5'!o of the fair market value of the leased 
premises, excluding improvements. 
4. 
It exempts 
certain transactions 
from 
capital gains 
taxation and certain land use laws.