(Tenn. Ct. App. December 9, 2008).
This appeal concerns a purchase option in a lease of a tract of land in Shelby County, Tennessee. Executed in 1950, the lease had an initial term of 50 years and six months. In 1953, the Lessee exercised its option to renew, allowing possession for an additional 50 years through 2050. In 2001, the Lessee attempted to exercise its option to purchase the leased property. Lessor then sought a declaratory judgment determining the validity of the purchase option, and if valid, the value to be paid for the Lessor’s interest in the property. The trial court found that the Lessee properly exercised the purchase option and that the value of the Lessor’s interest should be based upon the property as unencumbered by the remaining 50-year lease term. We affirm the trial court’s finding regarding the purchase option, but reverse its determination of the value of the Lessor’s interest in the property. Affirmed in part, reversed in part and remanded.
Opinion may be found at the TBA website: