A 99-year lease is simply a long-term lease, and the way it works depends on the terms of the particular lease. Lease terms vary depending on whether a lease is residential or commercial. Even so, almost all leases include terms addressing the length of the tenancy; the amount of rent and deposits the tenant must pay; whether the tenant may sublet or assign the property; and landlord access to the property. Commercial leases tend to grant more of the rights and responsibilities of ownership (even in relatively short-term leases of five or ten years), and they usually include detailed terms about legal rights and making improvements to the property.
For a lease term, there is nothing special about 99 years, rather the term of years is intended to convey the idea that the lease runs for the life of the tenant as most individuals don’t live longer than 99 years. Other common terms of duration for long-term leases are 50 years, 80 years and 175 years.
Why would someone want to enter into such a long-term lease? A person enters into a long-term lease to acquire the security of property ownership, which is theoretically indefinite, without actually having to purchase the property. There can be many reasons to lease rather purchase real property, but the most common reason to avoid an outright sale is because it is forbidden. For example, some countries only permit citizens to own land, so non-citizens who wish to reside in those countries typically enter into long-term leases. Also, long-term leases have the benefit of locking in a particular (hopefully low) lease payment, whereas a mortgage payment or a short-term lease will fluctuate with interest rates and the real estate market. Long-term leases are sometimes used to make gifts of real property or as tax and estate-planning devices.
Though the 99-year lease term may be derived from the individual lifespan, this type of lease is not restricted to use by individuals. Indeed, such long-term leases are usually used in the commercial context, for businesses, rather than in the individual, residential context. Private companies often enter into long-term leases for use of federal land. For example, most ports are run by private companies, but the ports themselves are government property. In order to house the employees and business infrastructure, a company might lease a building on the port for a term of 99 years. As well, restaurants, bars and other location-sensitive businesses may enter into a long-term lease because the success of the business depends on staying in that particular location.