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The restaurant refused to pay its formula share of the off-site improvement costs as provided in the lease. The leasing company brought an appropriate action against the restaurant to recover such costs.
Five years ago, the leasing company sold the one-acre parcel to an investor; the conveyance was made subject to the lease to the restaurant. However, the investor did not assume the obligations of the lease and the leasing company retained the remainder of Blackacre. Since that conveyance five years ago, the restaurant has paid rent to the investor.
3. The restaurant was to pay its share of the expenses for the off-site improvements according to a stated formula.
2. The leasing company was to maintain the access roads and the parking lot areas platted on those portions of Blackacre that adjoined the one-acre parcel and to permit the customers of the restaurant to use them in common with the customers of the other commercial users of the remainder of Blackacre.
1. The restaurant was to maintain the one-acre parcel and improvements thereon, to maintain full insurance coverage on the one-acre parcel, and to pay all taxes assessed against the one-acre parcel.
The lease provided that:
A leasing company owned Blackacre, a tract of 100 acres. Six years ago, the leasing company leased a one-acre parcel, located in the northeasterly corner of Blackacre, for a term of 30 years, to a restaurant. The restaurant intended to and did construct a fast-food restaurant on the one-acre parcel.
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A is incorrect. The restaurant's obligation is not implied; it is an express obligation contained in the lease.
C is incorrect. Privity of estate is irrelevant to the outcome of the issue. Because the leasing company retained ownership over the rest of Blackacre, the conveyance of the one-acre parcel does not affect the agreements between the restaurant and the leasing company — they are still in privity of contract. The restaurant must still contribute in compliance with the agreement they made with the leasing company.
D is incorrect. The investor's ownership of the land does not create any implied duty to pay maintenance costs.