Childs

Appellants, Eltinge and Graziadio Development Co., a partnership, George Eltinge and George L. Graziadio, the partners, appeal from a judgment interpreting the rental provisions of a ground lease entered against them in their action for declaratory relief against respondents, Kenneth and Margaret Childs.

On May 1, 1964, appellants (lessees) executed a ground lease on real property for a fixed period of 60 years, commencing May 1, 1964, in Palm Desert, with respondents (lessors) and terminating on October 31, 2025, with an option to lessees to extend the term for an additional 30 years.

Rental on a “net, net, net” basis was fixed for the first five years and was defined as “basic ground rent.” Thereafter at the expiration of each five-year period “additional ground rent shall be authorized by which 6% of.. . appraisal value exceeds the annual basic ground rent. ...” (Italics added.)

The lease in Article II thereof contains warranties by lessees which in pertinent part recite that “their purpose . . .” (italics added) is for the development of a shopping center; class A buildings will be constructed to accommodate the purpose and that no space will be subleased by…