My grandfather owned a large estate (farm). My uncle who married into the family (& his son) at one time tricked my grandfather into willing them the entire farm. After he (grandfather) found out what was really going on, he cancelled that document, had his will changed to reflect his 'true" intentions and gave each of his five sibblings a peace of the estate. My father receieved the largest portion.
My father leased 50 acres to my uncle & cousin for $900 per year for a solid 10 year period to be used for pasture (for cattle). He also leased to them the hunting rights in the same contract and ALL liability remained on my father. They have completed one year of this lease and during this first year they sub-leased the 50 acres to another farmer and they also sub-leased the hunting rights. this was not authorized in the contract.
My question is this:
If my father places his estate in a landtrust with me as the Trustee… since the trust will be the New Owner, will I as Trustee have to honor this untoward lease or can I submit to them a new NNN lease or quit?
Also, my father did sign the lease with “without prejudice UCC1-207” above his signature… does this give him the right to cancel the lease at will?
If the lease specifically states no sub leasing your uncle would be in violation and subject to court action and could be forced to quit the lease. It is very difficult to sue and win to break a lease if you are the landlord pretty much for any reason other than non payment. Selling the property to a trust or a stranger does not change the lease. There are a few exceptions such as foreclosure sale and sale to the govt for public use. I do not know about the UCC deal but I do not believe it will let you just break a lease for no cause.
Does the lease specifically set forth that the lease is “for pasture” and are the hunting rights set forth in the same document or a seperate one?
If so I would assume that the rights reserved by your father under ucc 1-207 include, for example, Mineral rights, the right to plow the land and plant crops, that sort of thing. I would not, therfore, conclude that your uncle is in violation of the lease by conveying on the rights he recieved under the lease to sub-tenants.
BTW I consider myself a pretty savy real estate guy and I had to go look up the UCC thing. therefore my conclusion is that your dad is a very savy guy. Under those circumstances I doubt that you are going to be able to get this lease over-turned with anything other than your uncle failing to pay his rent since the court is going to rule that the savy landlord rented to a person well-known to him and intended to be bound by the document.
The lease specifically set forth that the lease is “for pasture” and the hunting rights are set forth in the same document. It does not however, mention anything about sub-leasing.
The UCC governs “contract law” and it gives the right “not to perform”.
Question: will the courts uphold a lease that is unfavorable to the Lessor?