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Cases in Real Estate
is a weekly update on real estate law, with legal principles illustrated and
explained by lawsuits from around the country. The topics are wide-ranging for
appeal to a broad spectrum of readers including lawyers, homeowners, investors
and the general public. Andrea Lee Negroni, a Washington DC
attorney and legal writer with 25 years of experience in financial services and
mortgage law, contributes the case summaries.
Real Cases in Real Estate will learn and be entertained by lawsuits
involving nuisance, trespass, zoning violations, deed restrictions, title
insurance, public utilities, mechanics liens, construction defects, adverse
possession, foreclosure and eviction, divorce and marital property rights,
tenants' rights, and more. Real Cases in Real Estate uncovers the
unpredictable, amusing, and sometimes outrageous disputes between next-door
neighbors, contractors and homeowners, condo boards and residents, real estate
brokers and homebuyers, and zoning administrators and developers.
cited case summary highlights the essential law of the case and explains the
principal legal theories and concepts relevant to the outcome. Plain language
treatment makes Real Cases in Real Estate accessible to lawyers and
follow real estate law professionally or as a hobby, you'll find something new
and useful every week in Real Cases in Real Estate.
for the Week of July 31st, 2012
Apartment Complex Owner's 17-Year Battle Over Possession of the Laundry
In 1980, Coinmach leased the
laundry rooms for 10 years at the Garden View Apartments in Harris County,
Texas, agreeing to install and operate laundry equipment and pay the owner a
percentage of the laundry room receipts. Near the end of its lease, Coinmach
extended its lease for another 10 years. During the extension period, in 1994,
the apartment complex was sold at foreclosure; the foreclosure buyer resold it
to a corporation. The new corporate owner notified Coinmach to vacate the
laundry room. Coinmach claimed its lease was still valid and refused to vacate.
The parties' lawsuits over possession
of the laundry rooms have been in Texas courts since 1996. The Texas Appeals
Court recently explained the effect of a foreclosure on a lease. "When a
landlord-mortgagor is foreclosed upon, the general rule is that a tenant's
lease is terminated." The tenant then becomes a holdover tenant, leading
to the question: What are the rights of a holdover tenant? The answer typically
depends on whether a new lease is formed by the owner and holdover tenant, or
not. If not, the holdover tenant becomes either a "tenant at will" or
"tenant at sufferance." Tenants
at will lawfully possess the premises, albeit for no fixed term, and the
owner may put them out at any time. Conversely, tenants at sufferance occupy premises wrongfully. In fact, tenants
at sufferance differ from trespassers only because of their previous rightful
If the owner and holdover tenant
make no new lease, whether the holdover tenant is "at will" or
"at sufferance" can depend on the owner's conduct toward him. In this
case, the owner tried to get Coinmach out of its laundry rooms immediately
following the foreclosure. Based on overwhelming evidence of its
"unwavering disinterest" in continuing any relationship with Coinmach,
Coinmach was found to be a tenant at sufferance. Faced with this legal conclusion,
Coinmach claimed its possessory rights could not be terminated until a legal
eviction was conducted. The Texas court rejected this claim. "A tenant who
remains in possession of premises after the term of the lease occupies
wrongfully as a tenant at sufferance and is impliedly liable to the landlord
for the use and occupation or the fair rental value of the property."
Seventeen years after the
apartment complex changed hands following foreclosure, the owner now has the
blessing of the Texas courts to pursue claims against Coinmach for trespass and
Aspenwood Apartment Corp. v. Coinmach, Inc., 349 S.W.3d 621, 2011
Tex. App. LEXIS 957 (Feb. 10, 2011) [enhanced version available to lexis.com subscribers].
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