Legal Question in Real Estate Law in California

If I understand you correctly, you bought 26 acres subject to a 25 year lease and then someone else bought the remaining 24 acres subject to the lease. That does mean that you are both lessors and your approval is needed. Obviously the lease requires approval of all owners because the income from growing grapes which is used to pay the lease has now decreased which may be a potential threat to your property interests.

The phraseology of your question lends a bit of confusion. You ask, ".....can the lease allow.." Literally, the answer is yes, because the lease could contain such a provision. However, I think you mean "....DOES the lease allow......"

If the latter interpretation is correct, my first reaction was to agree with Mr. Shers that the answer is no, and for the reason he gives. On second though, I am less sure he is correct. The restriction on building houses seems to be a restriction upon the lessee, not on the lessor. The lessor would "automatically" be prevented by the lease from building houses because he has surrendered possession of the land to the lessee for the term of the lease, but there was nothing in the lease or the law to prevent the lessee from voluntarily giving two acres back to the lessor, perhaps for a price, for a house during the time there was only one owner/lessor. Whether the sales of the two parcels to different owner/lessors would change this right (of the lessee to surrender two acres of the lease back to a lessor) due to income-protection concerns or any other reason is somewhat doubtful, in my opinion.

In any event, the owner/lessor wishing to build would clearly need the permission and cooperation of the grower/lessee, who is in a position to dictate what happens to the land during the lease period, subject only to the lease's terms and general land-use laws and ordinances.

In my opinion, giving you a reasonably reliable answer would require review of the lease itself and careful research to find applicable case law and to review the applicability of general provisions of real-property law, such as covenants running with the land and division of land subject to long-term leases. I'll do a little research and post a follow-up answer if I find anything of interest.

I cant say anything unless I take a look at your leases.

Best,

Daniel Bakondi, Esq.

[email protected]

415-450-0424

The Law Office of Daniel Bakondi, APLC

870 Market Street, Suite 1161

San Francisco CA 94102

http://www.danielbakondi.com

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