Opinion ID: 1685818
Heading Depth: 1
Heading Rank: 2

Heading: Cancellation of the leases

Text: Appellants' next argument is that the circuit court erred in canceling the leases from Van Carr Enterprises to Zhang Corporation because no fraud was shown. The circuit court actually ruled as follows: The court disagrees with [Appellants'] argument that paragraph nine of the proposed decree should be amended to state that the Warranty Deed is `subject to all outstanding leases.' The remedy of specific performance requires that the defendants deliver merchantible [sic] title to the plaintiffs and the court directs them to do so. The remedy of specific performance would void these leases because any and all interest the defendants have created in themselves were improper. The option to purchase agreement stated, Unless otherwise specified, conveyance of the Property shall be made to Buyer by general warranty deed, in fee simple absolute, except it shall be subject to recorded instruments and easements if any, which do not materially affect the value of the Property. Thus, to comply with the specific-performance order, Appellants were required to convey a clear title to Appellees. Regarding the leases, the circuit court found that the leases were for a term of ten years at a shockingly low rental rate with option to renew for an additional ten years at a monthly increase of only $100.00 per month. The unreasonably low rental and terms of the lease, as found by the circuit court support a conclusion that the value of the property would materially be affected by the lease agreements between Van Carr Enterprises and Zhang Corporation. Accordingly, we hold that the circuit court did not err in finding that the Warranty Deed was not subject to the outstanding leases.