I've allowed a loved one to build his own cottage on my land. Since he paid for it and did the construction himself, I want him to have legal ownership of the cottage but not the land it is situated upon. The cottage can be easily lifted and placed upon a flatbed truck for transport as it is not affixed to the ground. If I should die or sell my land, I want to make sure that whoever takes possesion of the land will know that the cottage is the personal property of my loved one.
Since the cottage is not physically or legally affixed to your land, this may be as simple as consulting with a local attorney. You might ask him about granting the builder a life estate for his cottage on your property, then filing it with the county recorder. At least that way there would be a legal record of his ownership and your consent.
Another way to handle this would be to set up a land lease. Rather than showing that your loved one has any title to the land, the land lease will give him the legal right to stay on the property as long as the lease remains in effect. This protects your loved ones interest in the land while making it clear to a future buyer that he does not have any ownership of the land itself.