Seneca Leasing & How That Could Affect You.
How Salamanca Became Unique
Salamanca, New York, holds the distinction of being the only municipality in the United States built almost entirely on land leased from an Indian reservation. This unique arrangement stems from the history of the "Seneca lease," a story that dates back to the early 1800s. During that time, railroad companies sought leases from the Seneca Nation to lay tracks through the 22,640-acre Allegany Reservation, which encompasses the resource-rich Allegany River Valley.
Expansion and Early Challenges
By the mid-1800s, the non-Indian population in the valley grew significantly, as did the number of settlements and leases in areas like Salamanca, Great Valley, Carrollton, Vandalia, and Red House. However, none of these leases had the necessary Federal authorization or approval, which led courts to declare them invalid.
Congressional Intervention
To address these issues, Congress passed the Act of 1875, which authorized the Seneca Nation to lease lands within the Allegany and Cattaraugus Reservations. This Act also confirmed existing leases but limited their terms to five years, with an option to renew for twelve years. In 1890, Congress amended the Act to allow leases for terms not exceeding 99 years.
The 1991 Lease Renewals and Negotiations
As the leases approached renewal in 1991, tensions between Indian and non-Indian communities rose. The negotiations highlighted past inequities, as the original leases lacked provisions to adjust rents over time. This imbalance created economic challenges and strained relations between the two groups.
The Seneca Nation Settlement Act of 1990
The resulting agreement, the Seneca Nation Settlement Act of 1990, addressed these inequities. It provided the Seneca Nation with fair compensation for past underpayments and established new leases with more equitable terms. The new leases, commonly referred to as "40/40 leases," have an initial term of 40 years and an option to renew for another 40 years.
These leases include rent adjustments based on the assessed value of the property, ensuring that payments increase with property values. Additionally, the Act authorized $60 million in compensation for the Seneca Nation, with $35 million coming from the Federal government and $25 million from New York State.
What It Means for Real Estate in Salamanca
Purchasing real estate in Salamanca requires additional steps due to the Seneca lease. Key procedural matters include:
Sending notices of assignment to the Seneca Nation.
Obtaining certified copies of the lease and estoppel certificates from the Seneca Nation.
Ensuring the deed contains an "assumption clause" that subjects the property to the terms of the Seneca Nation lease.
It's important to understand that buyers purchase the improvements on the land, such as a home, while assuming the existing lease for the land itself.
Why Work with an Attorney
Navigating the intricacies of the Seneca lease requires expertise. A knowledgeable attorney can guide you through these unique legal and procedural requirements, ensuring a smooth transaction whether you are buying or selling real estate in Salamanca.
