“Although the city of New Albany argued holdover tenants should not be given “another bite at the apple,” the Indiana Court of Appeals affirmed its original ruling that continued occupancy of the criminal justice center maintains the terms and conditions of the lease even after the agreement as expired.”
Beware. Dear Leader lost a match to the despised county government, and in a fit of pique he now might try to TIF Greenland.
COA continues terms of justice center lease in Floyd County (August 15, 2019; Marilyn Odendahl, The Indiana Lawyer)
Although the city of New Albany argued holdover tenants should not be given “another bite at the apple,” the Indiana Court of Appeals affirmed its original ruling that continued occupancy of the criminal justice center maintains the terms and conditions of the lease even after the agreement as expired.
The southern Indiana city raised its holdover arguments in a petition for a rehearing in City of New Albany v. Board of Commissioners of the County of Floyd, New Albany Floyd County Indiana Building Authority, 18A-MI-1627.
A dispute arose between the parties over the criminal justice center. In 1992, the county entered into 15-year lease with the building authority, allowing the county to lease the center while the city sublet space from the county. The lease included a provision that allowed the county to request the title of the property at the conclusion of the agreement.
Ten years after the lease expired, the county demanded the title but the building authority refused. The Court of Appeals, in a May 22 decision, ruled the building authority lacks the statutory authority to agree to such a provision.
However, the appellate panel unanimously agreed the county could still exercise its purchase option contained in the 1992 lease. Because the county continued to occupy the justice center and pay its share of the operational costs under the terms of the lease long after it had expired, the county could still acquire title by buying it from the building authority.
The city asked for a rehearing on that ruling. In part, the city argued the language in the lease limits the purchase option only to the time prior to the expiration of the agreement.
“Holdover tenancy is not intended to give lessees another bite at the apple,” the city asserted in its petition for rehearing. “It is designed to promote stability in tenancies. The policy that purchase options do not survive expiration is consistent with this interest.”