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f <br /> James L.L. Barton. P.G. <br /> April 13. 2007 <br /> Page 6 of 14 <br /> Rutter: California Practice Guide: Real Property Transactions <br /> (Greenwald & Asimow). Ch. 7. Groundleaseholds. ¶A. Nature and <br /> Characteristics of Ground Lease. <br /> The 1954 lease from the then owners to Langendorf United <br /> Bakeries is clearly a "triple net" lease. Langendorf United Bakeries <br /> agreed to: <br /> a. Pay all taxes—see ' j6. REAL ESTATE TAXES AND <br /> ASSESSMENTS," pp. 2-4. <br /> b. Pay for all insurance—see"117. FIRE AND OTHER HAZARD <br /> INSURANCE." p. 4. <br /> c. Pay for all repairs and maintain the property—see '`¶8. REPAIR AND <br /> MAINTENANCE OF PREMISES"pp. 4-5. <br /> And, Langendorf United Bakeries agreed that it would never commit any <br /> waste. damage. disfigurement, or injury to the property—see "¶1 1. COVENANT <br /> AGAINST WASTE,"p. 6. <br /> It also promised that it would comply with all laws. and "...Lessee covenants <br /> that it ...will not cause or,naintain any nuisance in, at, or on the demised <br /> premises." See 517. USE TO COMPLY WITH LAW." p. 9 (emphasis added.) <br /> Finally, Langendorf and the owners agreed that Langendorf could lease the <br /> property for twenty-five(25) years, until January 31, 1979. See 112. TERM, p. 2. <br /> This meant that any owner of the property had no financial obligations with <br /> respect to the properry. .As explained by the California Suprenne Court in Brown v. <br /> Green,cited above, the owners decided to give up the speculative advantages of <br /> ownership inn exchangefor a steady net rental. The tenant, Langendof United <br /> Bakeries, ill tiow, gambled that the location would be valuable.for 25 years for its <br /> bakery business activities. The tenant assnuned all risks of taxes, insurance, and <br /> maintenance costing a lot nnore than anyone might think in 1954. <br /> And, as shown by the terms of the lease, any subsequent owner of the property <br /> would give up any speculative advantage of ownership inn exchange for a steady net <br /> rental. My client relied on the fact that Interstate Brands Corporation had created <br /> the contamination and was fixing it—keep in mind that Interstate Brands did not stop <br /> its it•ork to "abate the nuiscnnce"until five (5) vears after our client sold the property. <br />