>Daily Development for Tuesday, July 29,
>by: Patrick A. Randolph, Jr.
>Elmer F. Pierson Professor of Law
>UMKC School of=20 Law &nbs p;   ; =20
>Of Counsel: Husch Blackwell=20 Sanders
>Kansas City, Missouri=20
>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renewed by 20 law, the provision stating that the lease continues only if =E2=80=9Cit is=20 satisfactory=E2=80=9D is superceded by statutory language providing that oral annual=20 farm leases will renew unless landlord indicates nonrenewal on or before June=20 30.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)
>Seidenstricker and the Dosses' predecessor in title entered into a=20 written lease for the term of January 1, 1993 through January 1, 1994. The=20 lease had language appearing to give either side the right to terminate at will=20 during the term:
>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
=E2=80=9Cgrandfathered=E2=80=9D to these facts.
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