New ERA Article October, 1996

So You Purchased An Apartment And Want
To Evict The Laundry Room Operator.
We Don't Always Get What We Want!

     So a new owner of an apartment building has requested you as
the  owner  of the coin operated washers and dryers installed  in
the  laundry room to vacate so that the new owner can install and
operate  his  own  equipment, or enter into  a  lease  with  your
biggest  competitor.   You  tell him the  equipment  isn't  going
anywhere and provide him with a copy of a lease you entered  into
with the previous owner of the apartment building.

      But  he  retorts  that he never signed  the  lease  or  any
document   assuming the lease, and did not know of its existence.
He  further  points  out  that the laundry  room  lease  was  not
recorded.   Accordingly, he advises you that he is not  bound  by
the  terms  of any such lease or contract and that you remain  on
the  premises as a month-to-month tenant.  He then  hands  you  a
thirty day notice of termination of the lease.

     So how might a laundry room operator respond?

      California Civil Code §1214 provides in part that:   "Every
conveyance  of  real  property . .  .  is  void  as  against  any
subsequent purchaser . . . in good faith. . . ."  A laundry  room
lease  is a conveyance of real property.  In order to be  a  good
faith,  innocent or bona fide purchaser of property, however,  so
as  not  to be subject to such a laundry room lease, one must  be
innocent  of  any  notice of the existence of  the  laundry  room
operator.

      Assuming a laundry room operator has maintained the  proper
signage, an operator might advise the new owner that he has  such
notice because signs upon the equipment or upon the walls in  the
laundry  room give notice of the name and address of the  laundry
room  operator.  The operator might further advise the new  owner
that  he  had an affirmative obligation to inspect the  premises,
including  the laundry room, to determine the presence of  anyone
outside the chain of title.

     In purchasing an apartment building, income from the laundry
room  can  generally  be found in the broker's  listing  for  the
property.    Income   schedules  available  for   inspection   by
prospective purchasers and their lenders normally include laundry
room  income.   Such information provides further notice  of  the
existence of a laundry room lease.

      The fact that the laundry room lease is unrecorded will not
be  of assistance to the new owner if he otherwise had notice  of
the  existence of the laundry room lease.  California Civil  Code
§1217 provides "An unrecorded instrument is valid as between  the
parties thereto and those who have notice thereof."

     The California Court of Appeal advises that,

                "an  unrecorded lease is  not  void  as
          against  a  purchaser who has notice  of  the
          lease  or  such notice as should put  him  on
          inquiry as would disclose its existence. .  .
          .   The  rationale of this  rule  is  that  a
          purchaser of premises occupied in part  by  a
          third person under an unrecorded lease cannot
          be  said  to  be an innocent purchaser  since
          possession by such third party may constitute
          notice to the purchaser, provided it is open,
          notorious,  exclusive and  visible,  and  not
          consistent with the record title. . . ."

     It has also been held that "the purchaser is under a duty to
make  inquiry of [the] strangers' rights, and failure  to  do  so
deprives him of the status of bona fide purchaser."

      Remember, each situation of this type involves a  different
set  of  facts.   The  message  here?   Proceed  cautiously  with
knowledgeable advisors in your corner!


[This column is intended to provide general information only  and
is  not intended to provide specific legal advice; if you have  a
specific  question  regarding the  law,  you  should  contact  an
attorney  of your choice.  Suggestions for topics to be discussed
in this column are welcome.]


Reprinted from New Era Magazine
Myles M. Mattenson © 1996-2002

	Myles M. Mattenson ATTORNEY AT LAW 5550 Topanga Canyon Blvd. Suite 200 Woodland Hills, California 91367 Telephone (818) 313-9060 Facsimile (818) 313-9260 *Email:* MMM@MattensonLaw.com *Web:* http://www.MattensonLaw.com	So You Purchased An Apartment And Want To Evict The Laundry Room Operator. We Don't Always Get What We Want!
Myles M. Mattenson engages in a general civil and trial practice including litigation and transactional services relating to the coin laundry and dry cleaning industries, franchising, business, purchase and sale of real estate, easements, landlord-tenant, partnership, corporate, insurance bad faith, personal injury, and probate legal matters. In providing services to the coin laundry and dry cleaning industries, Mr. Mattenson has represented equipment distributors, coin laundry and dry cleaning business owners confronted with landlord-tenant issues, lease negotiations, sale documentation including agreements, escrow instructions, and security instruments, as well as fraud or misrepresentation controversies between buyers and sellers of such businesses. Mr. Mattenson serves as an Arbitrator for the Los Angeles County Superior Court. He is also past chair of the Law Office Management Section of the Los Angeles County Bar Association. Mr. Mattenson received his Bachelor of Science degree (Accounting) in 1964 and his Juris Doctorate degree from Loyola University School of Law in 1967. Bi-monthly articles by Mr. Mattenson on legal matters of interest to the business community appear in alternate months in The Journal, a leading coin laundry industry publication of the Coin Laundry Association, and Fabricare, a leading dry cleaning industry publication of the International Fabricare Institute. During the period of May 1995 through September 2002, Mr. Mattenson contributed similar articles to New Era Magazine, a coin laundry and dry cleaning industry publication which ceased publication with the September 2002 issue. This website contains copies of Mr. Mattenson's New Era Magazine articles which can be retrieved through a subject or chronological index. The website also contains copies of Mr. Mattenson's Journal and Fabricare articles, which can be retrieved through a chronological index. In addition to Mr. Mattenson's trial practice, he has successfully prosecuted and defended appeals on behalf of his clients in various areas of the law. Some of these appellate decisions are contained within his website.