>Daily Development for Tuesday, July 29,
2008=20
>by: Patrick A. Randolph, Jr.
>UMKC School of=20
Law &nbs
p;
; =20
>Of Counsel: Husch Blackwell=20
Sanders
>Kansas City,
Missouri=20
>dirt@umkc.edu
>LEASES; HOLDOVER;
RENEWAL:=20
Where a farm lease provides that it will last for a year
=E2=80=9Cprovided it is=20
satisfactory for both parties=E2=80=9D and for a number of years
following the original=20
the tenant has held over, and the lease therefore has been renewed by 20
law, the provision stating that the lease continues only if
=E2=80=9Cit is=20
satisfactory=E2=80=9D is superceded by statutory language providing that
oral annual=20
farm leases will renew unless landlord indicates nonrenewal on or before
June=20
30.
>
>Seidenstricker=20
Farms v. Doss, ___ S.W.3d ___, 2008 Westlaw 95773 (Ark.=20
1/10/08)
>
>
>TO
HAVE AND TO=20
HOLD unto said TENANT from the date of January 1, 1993, unti the first
of=2
January, 1994, provided it is satisfactory with both parties. After one
party=20
has given the other a 90 day notice in writing before the expiration of
this=20
lease which is accepted by the other party, the term of said lease shall
be=20
renewed or extended for another year under the same terms and=20
conditions.=E2=80=9D
>
>In
July 1993, the=20
Dosses acquired ownership of the farm. Seidenstricker continued to make
annual=20
rental payments and farm the land until 2001. No written renewal or new
lease=20
was executed by the parties at any time after 1993, although the parties
annually met at harvest time to discuss issues.
>
>In
September,=20
2001, the Dosses orally notified Seidenstricker that the lease would
terminate=20
at the end of 2001. Subsequently, Seidenstricker filed suit against the
Dosses=20
alleging that the Dosses improperly terminated the lease, arguing the=20
applicability of an Arkansas statute that provided:
>
>"The
owner of=20
farmlands which are leased under an oral agreement may elect not to
renew the=20
oral rental or lease agreement for the following calendar year by giving
written=20
notice by certified registered mail to the renter or lessee, on or
before June=20
30, that the lease or rental agreement will not be renewed for the
following=20
calendar year."
>
>The
trial court=20
dismissed the case, finding that the provision in the 1993 lease
governed the=20
parties' relationship, and therefore the Dosses properly terminated the=20
lease.
>
>On
appeal, the=20
Supreme Court of Arkansas considered whether the 1993 lease or the
statute=20
(requiring notice by June 30) governed in the present case. In deciding
this=20
issue, the court began by addressing whether Seidenstrecker leased the
farmland=20
under an oral lease or whether it was a year-to-year tenant, since the
statute=20
specifically applied to tenancies from year to year. It noted that
parties to a=20
lease may create a tenancy from year to year if the tenant holds over
after the=20
end of the original term, continues to pay rent in accordance with the
terms of=20
the original lease, and the landlord accepts the payment. Here, though
the=20
original lease was never explicitly renewed and a new lease was never
executed,=20
Seidenstricker continued to farm the land and pay rent through 2001,
which the=20
court concluded constituted a tenancy from year to year. Therefore there
was no=20
oral renewal of the original term lease, but rather an annual periodic=20
tenancy. The court concluded that, even th
ough typically when holdovers result in annual period=20 tenancies, the terms of the original lease apply, the =E2=80=9Cat will=E2=80=9D provision of the=20 original lease did not apply here, since it expressly was included in the=20 statement of a term lease for the first term only. Therefore the statute=20 applied and required that the terminating party give six months notice before=20 terminating the lease.
>
>[T]he
1993 lease=20
gave an explicit period of time for which the lease was to govern" (one
year),=20
and nothing in the contract contemplated a continuation of the lease if=20
conditions remained satisfactory. The renewal provision "was essentially
waived=20
by the parties' conduct since the expiration of the original 1993 lease=20
term."
>
>Comment: There=20
were two dissenters who argued that the traditional rule is that all the
terms=20
and conditions of a lease, other than the term, continue to apply when
there is=20
a renewal by holdover. But note that Arkansas, like most other
states=20
today, does not apply that rule literally, since the holdover of a term
lease=2
resulted in a periodic annual tenancy, and not a term lease. So it
cannot=20
be said that all the terms of the original lease remained valid.
But=20
still, it was tricky business to for the court to conclude that the
somewhat=20
unusual [at least in the editor=E2=80=99s experience] =E2=80=9Cat will
termination=E2=80=9D provision=20
did not apply. True, the terms of the original agreement said that
it was=20
only for one year, but the parties implicitly flipped into a year to
year lease=20
with respect to all other terms of the lease (such as rent), so why not
include=20
this provision as well? Perhaps we just have to conclude that the
court=20
saw a public policy in the statute that it thought should be
ap
plied. The statute, by the way, was
repealed, but=20
=E2=80=9Cgrandfathered=E2=80=9D to these facts.
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>DIRT is a service
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