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LAW 501 Pursuant to an urban redevelopment plan, the city of Northeast “condemned” property located at 1416 F

Author:
June 8th, 2024

Pursuant to an urban redevelopment plan, the city of Northeast “condemned” property located at 1416 F. Street for 2.5 million, the fair market value of the property at the time of the condemnation. At the time of the taking, the property was owned by Janice Owens, a local real estate developer, and was under a 30 year lease, expiring in Oct 2020, to Metropolitan Parking, which used the property as a parking garage. Owens claims the entire condemnation award properly belongs to her as the owner of the property, while Metropolitan claims that it is entitled to a portion of the award measured by the fair market value of its leasehold interest. Because of the dispute between Owens and Metropolitan, the city has paid the condemnation into court for a judicial determination of the distribution of the condemnation award. The lease between the two does not specifically mention condemnation. It contains the following clauses.Section 1.04- Any reference herein to termination of this lease shall be deemed to include any termination hereof by expiration, default, or otherwise.Section 20.01- Upon termination of this this by default, lapse of time, or for any reason, all of the right, title and interest of Lessee in and to the premises and the leasehold estate created hereby shall automatically vest in Lessor without the execution of any further instrument.(1) Assume you are the lawyer representing Metropolitan. What fact investigation would you undertake in preparing for your case?(2) Assume you know no other facts than those stated above, what arguments would you make in support of Metropolitan claim to a share of the condemnation award?(3) Assume you represent Owens. What arguments would you make in support of the entire condemnation awards?(4)Assume you represent a tenant who is negotiating a lease of property. Draft a clause to include in the agreement that would protect the tenant against the risk of loss resulting from condemnation?

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