Relating to Real Estate

PGMC IV, LLC vs. BE UTC Dewey Parcel, LLC, No. 1192, Sept. Term, 2016, 2017 WL 2962820 (Md. Ct. Spec. App. July 12, 2017), involves an action to quiet title to a parking lot (the “Lot”) in Hyattsville. PGMC owned an office building across the street from the Lot. The facts showed that the Lot had been leased to PGMC in 2001 for a 35‑year term but PGMC stopped paying rent in 2004. In 2006 it had leased a parking garage to replace the use of the Lot, its tenants stopped using the Lot, and its interest in the building from which its tenants came to park on the Lot was foreclosed in 2014.

The then owner of the Lot brought a suit to quiet title on the grounds that PGMC had abandoned the ground lease, and while the case was pending, title to the Lot was transferred to BE-UTC Dewey Parcel (“Dewey”).

The Circuit Court for Prince George’s County ruled on motion that the title to the Lot was vested in Dewey free and clear of any claim of PGMC arising out of the ground lease.

The Court of Special Appeals ruled that when a tenant leaves premises vacant with a clear intention not to pay rent, it has abandoned the property. It found all of PGMC’s actions, beginning with non-payment of rent in 2004, amounted to a clear abandonment. It is hard to see why PGMC fought this case up to the appellate court, but it apparently wanted to keep some control over the Lot, perhaps to use as a bargaining chip in future transactions. The Court of Special Appeals found PGMC’s claims that it had not abandoned the lease crumbled in the face of the undisputed facts. Accordingly, it affirmed the trial court ruling that Dewey owned the Lot free of any claim by PGMC.

The case is a reminder that a lease can be ended by abandonment of the premises by the tenant.

For questions, please contact David Fishman (410) 576-4234.