The land lease at Monarch Bay is always a hot topic of discussion. This is even more true now that the infamous 2017 and 2020 purchase deadlines are coming closer. Are you interested in buying a Monarch Bay home for sale? Here is what you should know about the buyout and lease options in Monarch Bay, Dana Point.
Background
The Monarch Bay Community is built on land that has long been privately owned. For nearly five decades, Monarch Bay residents have owned their homes, but they had to pay rent to the landowners for the land their houses sit on. The landowner has made provisions for the residents to purchase the land their homes are built on July 1st, 2020. The residents founded their own organization, the Monarch Bay Land Association (MBLA), for the purpose of acquiring, holding and executing this option to purchase a fee interest in Monarch Bay. In 2012, the landowner and MBLA entered into a legal agreement providing for the early exercise by individual residents of the option to purchase their lots through MBLA. In December 2012, the fee interest in 48 lots was sold by MMB to its Monarch Bay residents for nearly $85 million.
Buying Option in 2020
Each resident has the right to purchase his/her lot on July 1, 2020 even if less than 100% of the remaining residents purchase at that time. In addition, MBLA has the right to schedule a second closing after July 1, 2020 but before the end of 2020 for any “stragglers”.
At the 2020 closings, residents will be entitled to purchase their lots through MBLA for 65% of the appraised value. Both MMB and MBLA will hire an appraiser to appraise the value of the individual residential lots. If the total of those two appraisals are within 10% of one another, the lot values in the two appraisals will be averaged. If not, the two appraisers will select a third independent appraiser to appraise the individual lot values. The two appraisals closest in total amount will be averaged and the third appraisal will not be considered.
The 2017 opportunity
The existing legal framework permits MMB and MBLA to enter into further lot offerings until the end of 2017. MMB has indicated an interest in doing two or three more offerings before the end of 2017, but there is no requirement to do so. If an additional offering occurred, it is likely that the lot prices would be established by MMB and that a minimum number of purchasers and/or a minimum dollar amount would be required as a condition to closing. MMB will not consider offers to purchase from individual residents.
For more information, please contact your Monarch Beach Real Estate Agent at (949) 395-0960.
A little history
Monarch Bay is a picturesque oceanfront community surrounding a beautiful private beach club and a pristine California beach. The 80-acre development consists of 214 lots, including two homes on double lots. The community is bordered by the Pacific Ocean, Salt Creek Beach, Three Arch Bay and the Ritz Carlton. Most Monarch Bay homes for sale have views of the whitewater coastline, Catalina and San Clemente islands and Salt Creek beach. Homes on the westernmost side also enjoy coastal views up to the Palos Verdes peninsula.
The Monarch Bay Ranch has been under the ownership of the Moulton family since the 1890’s (MMB owns Monarch Bay on behalf of the descendants). In 1960, the family agreed to a ground lease with the Laguna Niguel Corporation which resulted in 214 Residential Subleases. Developed in the 1960s, Monarch Bay’s architectural style ranges from post modern to Santa Barbara ranch style. The upper portion of the community consists of larger lots and has more of a residential community feeling. The beachfront portion offers more direct beach views and is accessed via the Beach Club Road gate.
Once a mixture of secondary beach homes, the community has evolved into more fulltime occupancy and substantial luxury residences. With only 214 lots, there is a close sense of community with most interaction occurring at the beach and Bay Club
This information is provided as a courtesy. It should not be considered legal, tax or other advice. Information and details are subject to change without notice. Please contact Monarch Bay Realtor Jaleesa Peluso at (949) 395-0960 for more information.