03/04/2026
Have you ever wondered how Reservoir leases actually work?
Well, here is a quick explainer.
The Pearl River Valley Water Supply District (PRVWSD or PRV) is a state governmental entity that operates the Reservoir and owns much of the adjacent land. PRV leases that land and collects annual lease fees to fund its operations. PRV is managed by a board of directors and an executive director.
Practically speaking, “buying” property that is PRV leasehold is very similar to buying any other property, but there are a few important differences a buyer should understand.
Say you find a nice house on PRV property that you want to “buy.” The seller will deed you the house and improvements, but they will also assign their lease from PRV.
In most cases, PRV originally leased the property to a developer or builder for a long term, typically 60 years. That original tenant then assigned the lease to a buyer, who later assigned it to the next buyer, and so on until it reaches your seller, who then assigns it to you.
An assignment simply means transferring rights under the lease to someone else. When you buy a PRV home, the seller assigns their lease rights to you.
As noted, PRV leases are typically 60 years long. So your seller’s seller may have had the original lease with a 60 year term. But what happens if you want a 30 year loan and the lease only has 15 years left?
Most lenders will not make a loan that extends beyond the remaining lease term. In those situations the closing attorney will request that PRV grant a new 60 year lease. In most cases PRV will approve that request without much fanfare. The lease assignment is recorded and the buyer receives a new lease from PRV for another 60 years, along with the annual lease fees required under the lease.
Of course, there are requirements in the PRV lease that a buyer or lessee should review and understand.
Buying a home on PRV land can involve a few additional steps at closing to make sure the lender is comfortable, especially if the lender is not familiar with reservoir lease property.
What Reservoir property are you watching?
