Daily Development for Wednesday, October 10, 2001

By: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
prandolph@cctr.umkc.edu

LANDLORD/TENANT; TERM: Alabama statute requiring that leases for more than 20 years must be recorded cannot be avoided by an argument that the parties have ratified the lease by accepting performance under it for a number of years and are thereby estopped.

Statutory purpose is clear, and lease is void for excess term if not recorded.

Achenbach v. FB Huntsville Owners, LLC., 783 So.2d 4 (Ala. 2000)

The statute prohibits leases for more than 99 years and provides that leases for more than 20 years must be recorded or they are void for the period in excess of 20 years.

The ground lease in this case was not recorded and had an initial term of

24 years and several 5 year renewals. Near the end of the first renewal period, one of the co-owners of the landlord's interest decided that it wished to partition the property and have it sold stripped of the lease.

All the owners, including this one, had signed the lease, but the co-landlord relied upon the statute to established that the lease was void.

The tenant, relying upon dicta in a 1987 Alabama Supreme Court case, argued that the co-landlord's actions in accepting the benefits of the lease for 25 years indicated a ratification of the lease and estopped it from raising the bar of the statute to its continued validity.

The court held specifically that the early language, also in an Alabama Supreme Court opinion, was erroneous. The statute is mandatory, and the lease is void.

Comment 1: If that's what the legislature wanted, then obviously, if writing on a clean slate, the Alabama court should have upheld that intent. But it does seem odd that it would backtrack from a quite explicit statement less than 15 years earlier. Some courts would have concluded that if the legislature had really intended the result to be different than the earlier opinion had stated, then the legislature had 15 years to so indicate. Its silence might be viewed as a legislative ratification.

Courts should be cautious about disturbing vested expectations in property based upon explicit language in their opinions. The court doesn't mention this concern in its decision. Let's hope it carefully evaluated it in its deliberations.

Comment 2: If the tenant could always have remedied the problem, prior to the disavowal of the lease, by the simple expedient of recording it, then perhaps we're making too much of an argument of reliance. Of course, if the lease was not notarized it likely couldn't have been recorded. Perhaps Alabama DIRTers can clarify the point as to whether late recording saves a lease (before or after the twenty years) and also whether the normal rule requiring notarization to record is the law in Alabama.

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