Legal Question in Real Estate Law in Utah

ground lease

My wife has entered into a 99 year lease on a parcel of ground that is slated for a large housing development around it. The ground will be used as a farm, orchard, nursery, and such. the memorandum of lease is recorded with the county of Washington and the ground is located in the city of Washington Utah.the lessee has paid the annual lease payment and the taxes. The question is if the original owner (the party to whom the lease was let (lessor) defaults and the property is foreclosed on by the mortgage company, is the lease still binding and still in force regardless of who ends up with the property. (sheriffs sale etc.)The mortgage company is threatening foreclosure and we are not sure what our legal rights are. Please advise

Thank YOU


Asked on 5/22/06, 9:23 am

1 Answer from Attorneys
Alvin Lundgren Alvin R. Lundgren, L.C.

Re: ground lease

It depends on whether the lease was signed first or the mortgage. If the mortgage is first, then upon foreclosure all agreements after the mortgage are voided. Anyone can bid on the property at foreclosure sale, including the lessee. You wife may want to contact the lessor and see if she can simply buy the property and save the lessee the problems associated with the foreclosure.

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Answered on 5/22/06, 12:28 pm


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