Opinion ID: 1663253
Heading Depth: 1
Heading Rank: 2

Heading: was the option exercised so as to bind the remaindermen?

Text: The Remaindermen contend that even if the option to renew contained in the 1971 lease is valid and enforceable, the annual rent agreed to by the First National Bank of Grand Forks as guardian for Edith M. Thompson on July 25, 1975, is not binding on the Remaindermen because they were not parties to such agreement. This court notes that a life tenant cannot make a lease which will extend beyond the life estate or confer greater rights upon his lessee, as against the holders of future interests, than those which he himself possessed. See 31 C.J.S. Estates § 54; 171 A.L.R. 489 (1947); and 4 Thompson on Real Property § 1896 (1961). However, in the instant case, Drees' option to renew its lease was granted by Edith M. Thompson on February 18, 1971, at which time she still held said real property in fee simple. The Remaindermen did not acquire their future interest until June 10, 1971, and thus took subject to Drees' option to renew. The only agreement made by Edith M. Thompson in the capacity of a life tenant was the setting of the rental amount for the renewal term on July 25, 1975. The Remaindermen ask whether such agreement made only by the life tenant is binding after the death of the life tenant. We find the life tenant's agreement setting the rental amount for the renewal term to be binding on the Remaindermen where such option to renew provided that renewal rental was to be fixed by the future agreement of the lessor and the lessee and where such Remaindermen took their future interests subject to such option to renew. We find it necessary to so find to avoid increasing the bargained-for burden on the lessee in cases where the Remaindermen's future interests do not become possessory during the life of the lessee's estate for years; and to avoid the uncertainty and expense of new negotiations and possible litigation as would be necessary in cases such as the one at bar. For the reasons stated herein, the judgment of the district court is affirmed. ERICKSTAD, C.J., and PEDERSON, VOGEL and SAND, JJ., concur.