Opinion ID: 1386091
Heading Depth: 4
Heading Rank: 2

Heading: Including the Beneficial Use Thereof

Text: The second prong of section 60 requires that to constitute a change in ownership there must be a transfer not only of bare legal title but also of the transferor's beneficial or equitable interest in the land. Plaintiff contends it conveyed no beneficial use of the entire parcel because it continues to enjoy the exclusive use of the portion under its control. We disagree. The owner of the legal title to property is presumed to be the owner of the full beneficial title. This presumption may be rebutted only by clear and convincing proof. (Evid. Code, § 662.) Here, plaintiff has presented no evidence that Metropolitan Life holds title to the property for plaintiff's benefit: there is no evidence showing a custodial or trust relationship, or that plaintiff sold the property for less than essentially the market price. Nor is plaintiff paying below-market rent under the lease; rather, the record reveals the contrary. There can therefore be no question that when Metropolitan Life purchased the property in fee simple absolute it acquired its beneficial use during the lease term. Metropolitan Life's decision to exercise its beneficial interest by exacting rent from plaintiff rather than acquiring physical control of the demised premises does not alter the character of the transaction. The fact that [Metropolitan Life] may not occupy the property during the lease period does not deprive it of its right to enjoy the value of its property represented by the rent. [Citations.] The sale and leaseback constituted a transfer of the beneficial use of the property within the meaning of section 60. ( Industrial Indemnity Co. v. City and County of San Francisco, supra, 218 Cal. App.3d 999, 1005.) Any other conclusion would ignore the commercial realities of the transaction: as counsel for amicus curiae City and County of San Francisco observed at oral argument, any other interpretation would mean, in the case of a large commercial building, that a change in ownership would rarely occur, for there would usually be tenants remaining in the building. It follows that the second prong of section 60's test was also met at the time of sale.