Leasehold Deed of Trust

Let me preface by saying, any help on this issue is truly appreciated!

We are having quite a debate regarding Leasehold Deeds of Trust. The question is, can a Lessee own the building that sits on Leased land? Some believe that "yes" the building is owned by the Lessee until the Lease has expired and then it reverts back to the owner. Then others believe, there is no way the building can be owned by anyone other than the land owner or "Leasor". My understanding.....as minimal as it maybe...is that yes, the building can be owned by the Lessee and he has all entitlement to (as long as his lease states this) do as he sees fit even to sell it as long as the Leasor agrees to the reassignment of the Lease. Which side is correct???? Yikes!

Now...taking all of that into consideration...if the building is in a flood zone, would flood be required? And if so, does the Leasee or Leasor provide it?

ACK!

There are entire towns at the Jersey shore built on leased land. Ocean Grove comes to mind. The building owner owns the building and has a 99 year land lease, usually.

And yes those mortgages have flood insurance provided by the building owner.

What happens to the building after the end of the land lease depends upon the terms of the lease and the wishes of the parties. Renew lease, move building, revert to land owner, etc.

These kinds of ownership questions need discussion with legal counsel to make sure you are documenting your loans correctly to protect the bank, let alone flood insurance.