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An example of the creative process....
blaisepascal
So the other day a curious legal question popped into my mind: are leases binding on new owners? (I think the answer is yes, but there are always issues).

To formulate the question as a court would see it, I needed a case, with details. For that, I needed a property owner, a lessor, and a new property owner, and a situation in which the conflict and question would come up.



So enter Alice, the property owner, and Mark, the leasor. I wanted an unusual lease so that the controversy would last a while, and which would allow for a change of ownership within the duration of the lease. So, Mark is leasing a farm from Alice for a 30y period, and Alice dies, causing the transfer of ownership.

But why did Alice have the farm, and why was she leasing it instead of selling it, especially for so long a period? It's a family farm that she inherited, but her life doesn't allow farming, and she wants fixed income from the farm instead of a lump-sum.

OK, so now I'm getting a picture of Alice: She's in her 50's or 60's, and is urban, say a fashion designer living in NYC. She inherited the farm, and it looking towards retirement, but with no desire to return to the family farm. Mark is somehow a reasonable lessor.

Pretty soon this is expanded: Alice was born in 1950 to a farming family in the midwest: Kansas, Nebraska, or Iowa, say. Her family runs a farm growing a square mile of grain (corn, wheat, or rice) with a crew of hired hands. She has 4 older brothers, all of whom are expected by the family to be more likely to take over the farm than she, so her family supports her artistic desires. One brother does not return from Viet Nam, another brother she ends up visiting every day in a NYC oncology ward until he's gone. A third brother, her sister-in-law, and her 2 nieces are killed by a drunk driver. Bill, the remaining older brother, inherits the farm and ran it for the last 10 years of his life, assisted by Mark, the farm foreman (and more, as Bill and Mark have come out to Alice, but not locally).

For estate planning purposes, Bill willed the farm to Alice (who, being family, would not have to pay inheritance taxes) instead of Mark (who would not be able to afford inheritance taxes, and would have to sell the farm to pay them). Alice, working on a plan agreed to by Bill and Mark, writes up a 30 year lease on the farm, requiring a payment of $5000/mo, using year 2000 dollars, adjusted by CPI. This works well for 11 years, when Alice falls ill and dies.

Geoff, Alice's son, has never lived on the farm, never knew the farm, and doesn't want anything to do with it. Land prices are at an all-time high (easily $10,000/acre), and he easily sells it to a neighboring industrial-sized corporate farm for $5M.

The legal question is: What happens to Mark?

The creative thought process is: This is an exceedingly over-specified cast of characters for this legal question. Why did my brain insist on fleshing out all these details to make a consistent story leading up to the legal question?

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Leases are not binding on new owners. The new owner is not party to the contract, so it cannot bind him/her.

The lessor would have a claim against the seller for breach of contract, if the seller sold the property without obtaining a continuation of the lease with the buyer. A lessor in a long-term lease like that who had any intelligence and knew that the property was being sold, might notify the title company of the fact, and/or bring a lien against the property, so the title company would withhold funds from the escrow, just as they would for an outstanding mechanic's lien.

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