The long-term lease is a contract that originates from rural code, whereby the owner concedes the long-term possession and use of a property to a tenant against a modest sum. The tenant is responsible for all necessary improvements without the possibility to reclaim these costs at the end of the contract.
Determined for a minimum period of eighteen years and a maximum of ninety-nine years, the contract implies a fragmentation of ownership and gives similar ownership rights to the tenant who can dispose of or mortgage the property rights (Article L. 451 - 1 para. 1, Code Rural).
Unless otherwise stipulated, the freeholder remains the owner of the land throughout the term of lease and becomes owner of any new construction at the end of the period.

The freeholder and the tenant have their own distinct accounting which may influence the rental value or the eventual redemption by one of the partners or by a third party.
The residual value of the constructions at the end of the lease will be assessed case by case depending on the terms of the lease, the type of construction and the location.
Given the context of evaluation, we discuss here only the methodology designed to assess the value of the long-term lease from the point of view of the freeholder.
We will however take into account the agreed rental using the usual methods in order to establish a figure acceptable to the tenant by using one of the following methods :  

• Net contribution.
• Rent sharing