In the case of a 99 year lease, the land will belong to the owner but it will be leased to the Muslim community in lieu of a rental. On expiry of the lease period, the land will have to be returned to the original owner and the structure (erected thereupon) removed or sold (to the owner). A Masjid built upon such land will thus not constitute a proper Shari’ee Masjid.
The land and structure of a Shari’ee Masjid belongs solely to Allah Ta’aala, and perpetually remains as a Masjid (once officially declared as a Masjid), and not used temporarily as a place of Salaah as in the case of a 99 year lease agreement. Hence, a Masjid put up on leased land will not be recognized as a Shari’ee Masjid.
The second option where a dwelling is purchased together with the land and then (perpetually) made Waqf for a Masjid is correct. We therefore suggest that the community chooses this particular option (even though it entails more expense), if their intention is to erect a Shari’ee Masjid. If their intention is to erect a Musallah only (where the 5 daily Salaah will be taking place) then they are at liberty to put up a Musallah on the leased land. However, the Musallah will not enjoy the same rewards and virtues as a Shari’ee Masjid.