A superior legal or equitable interest in leased property held by a third party that is not terminable at the landlord's will and remains in force when the tenant is entitled to possession. The interest takes priority over the leasehold so that its assertion can deprive the tenant of the contemplated use. After the tenant takes possession an eviction under the paramount title breaches the landlord's obligations.
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How its tested
Common Examples
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Holdover Asserting Superior Claim
Pierce Patterson held a three-year lease from the port authority that ended June 30. After the term expired Pierce continued mooring barges at the dock claiming ownership under a prior unrecorded deed. The authority had already leased the same space to Riverline Logistics effective July 1.
Prior Concession Blocks Later Lease
Prime Logistics leased a private dock from the port authority for fifteen years. Three years earlier Global Marine had received a recorded forty-year concession to manage all berths at the port that was not terminable at the authority's will. Global demanded that Prime vacate the dock.
Penelope Price leased the fifteenth floor of a building from Olivia. Three years earlier Olivia had executed a recorded contract for deed conveying the entire building to Seaside REIT. Seaside demanded possession from Penelope under its earlier equitable interest.
Partial Paramount Interest
Prosperity Investments leased an entire warehouse from its owner. A recorded mortgage on only the rear loading bay was already in place and not terminable at the owner's will. The mortgagee foreclosed and took possession of the bay after the lease began.
Post-Possession Eviction
Paul Peterson took possession under a twenty-year ground lease from Oceanfront. After entry a senior mortgagee foreclosed and evicted Paul from the entire parcel. Paul had no notice of the mortgage when the lease was signed.
Landlord's Duty to Deliver Possession
Pamela Phillips signed a five-year lease with a landlord who had previously leased the same space to another tenant whose term had not yet ended. The prior tenant remained in possession and refused to leave when Pamela's term began.
Hannan v. Dusch153 S.E. 824 (Va. 1930)
On August 31, 1927, Dusch leased to Hannan certain real estate in the city of Norfolk, Virginia, for fifteen years, the term to begin January 1, 1928, at a specified rental. There is no express covenant as to the delivery of the premises nor for the quiet possession of the premises by the lessee.
The declaration alleges that it thereupon became the duty of the defendant to see to it that the premises leased should be open for entry by the plaintiff on January 1, 1928. The petitioner was willing and ready to enter upon and take possession of the leased property and so informed the defendant. Yet the defendant failed and refused to put the plaintiff in possession or to keep the property open for him at that time or on any subsequent date. The defendant suffered to remain on said property a former tenant or tenants who occupied a portion or portions thereof and refused to take legal or other action to oust said tenants. Hannan alleged damages which he had suffered by reason of this alleged breach of the contract and deed and sought to recover such damages in the action.
Dusch demurred to the declaration on several grounds. One ground was that under the lease set out in said declaration the right of possession was vested in said plaintiff. There was no duty as upon the defendant to see that the premises were open for entry by said plaintiff.
When does a third-party interest qualify as paramount to a lease?
A legal or equitable interest qualifies when it exists at the time the lease is made, is not terminable at the landlord's will, and remains in force when the tenant is entitled to possession. The interest then takes priority over the leasehold.
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What remedies does a tenant have before entry when a paramount title exists?
The tenant may terminate the lease and recover damages or, if the paramount title affects only part of the premises, affirm the lease as to the unaffected portion and obtain damages plus rent abatement.
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Does the mere existence of a paramount title breach the landlord's obligations after the tenant takes possession?
No. After possession begins the landlord breaches only if the holder of the paramount title actually evicts the tenant and thereby deprives the tenant of the contemplated use.
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How does a prior recorded concession affect a later lease of the same property?
The concession is paramount because it predates the lease and is not terminable at the landlord's will. The later tenant therefore takes subject to the concession and cannot obtain a declaration that its lease controls.
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[1945] K.B. 509
…was ignorant of the boat's existence. Counsel for the defendant relied on Elwes as authority that the owner of land may have a superior title to things found embedded in or forming part of the soil. Salmond and other commentators have explained these authorities as compatible with the general principle that the first finder has…