4th St SJ v. Milpitas Vistas CA6

I. BACKGROUND

A. The Vacant Lot The vacant lot at issue in this case is in San José at the corner of Rosemary Street and North Fourth Street, not far from the airport. The lot was originally part of larger parcel, which in 1959 was leased for 98 years and then sublet. The sublease was later split into three lots, including the vacant lot and an adjacent lot on which a hotel was built, and the sublease currently extends until at least 2048. The sublease for the vacant lot provides for payment of rent to both the sublessor and the master lessor, the owner of the underlying property. It also allows the sublessor to mortgage its sub-leasehold interest. Finally, presumably to facilitate conveyance, the sublease requires both the sublessor and the master lessor to provide estoppel certificates concerning, among other things, the rent due and the existence of any setoffs or defenses against enforcement. B. The Transfer to 4th Street Both the lease and the sublease have been assigned multiple times. By 2003, the sublessor was Metro Eight Properties, and the sublessee was Rosemary Land Co.

1. The 2003 Deed of Trust In 2003, Rosemary Land Co. borrowed money from Vimar and Tara Kumar. This…