Broadmoor Enterprises, LLC v. Super Heat and Air, LLC
In a commercial lease dispute, the Second District reversed a final judgment that had allowed a tenant to take title under its purchase option free of a subsequently recorded mortgage and that had construed an ambiguous renewal clause, using parol evidence, to grant multiple renewal terms. The court held that the lease's broad subordination clause unambiguously subordinated 'all rights, privileges, and benefits' — including the purchase option — to any and all future mortgages, and that an ambiguous renewal clause must be limited to a single renewal because perpetual and multiple renewals are disfavored. It also reversed a postjudgment ruling excluding a tree parcel from the conveyance where the parcel was admittedly part of an adjudicated parcel.
Key facts
- Broadmoor Enterprises (landlord/mortgagee) and Super Heat and Air (tenant) disputed rights under a commercial lease containing a subordination clause, a purchase option, and a renewal provision.
- The trial court allowed the tenant to take title under its purchase option free of a subsequently recorded mortgage and used parol evidence to construe the ambiguous renewal clause as granting multiple renewal terms.
- +2 more key facts with a free trial
Why it matters
The opinion gives commercial real estate and lending counsel a clean statement that a broadly worded subordination clause swallows a tenant's purchase option, defeating equitable arguments and general lien-priority… — full analysis with a trial
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