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Be Careful Who You Yurt With: A Ground Lease May be Partitioned as an Equitable Remedy

In Karen Wynkoop v. Gerard Stratthaus, 2016 VT 5 (January 15, 2016), the Vermont Supreme Court affirmed in part and reversed in part the trial court’s decision granting the plaintiff a declaratory judgment partitioning a ground lease and awarding compensatory damages for her ouster from the property.

Issue: The parties signed a thirty-year ground lease for a ten-acre parcel at Star Meadow Farms in Walden, Vermont. They subsequently erected a yurt and an additional “secondary building” on the property. Soon after, the parties, who were unmarried but living together, experienced difficulties in their relationship and disagreed about who should remain living at the property and what rights each had to the lease and improvements made on the property. The trial court ruled in favor of the plaintiff and applied 12 V.S.A. § 5161 to partition the leasehold. Defendant raised four issues on appeal: (1) that a leasehold is not real property subject to partition; (2) that the trial court could not credit plaintiff for her sweat equity in assisting with improvements made to the land; (3) that the trial court erred mathematically in calculating plaintiff’s contributions to the property; and (4) that the trial court improperly found the defendant had ousted the plaintiff.

Holding: The Court affirmed the trial court’s decision finding the leasehold capable of partition. The Court also affirmed the finding that plaintiff had been ousted from the property and was entitled to compensation for her sweat equity relative to management and supervision of the yurt construction and other improvements made to the land. The Court, however, agreed with defendant that the trial court had made mathematical errors in calculating plaintiff’s contributions to the property and remanded the matter for re-calculation. Importantly, although the Court affirmed the trial court’s holding that the leasehold was capable of partition, it did so on different legal grounds than had been relied upon below. The trial court held that the leasehold was akin to “having or holding real estate” within the definition provided in 12 V.S.A. § 5161 and partitioned the lease on that basis. To the contrary, the Court held that the leasehold could be partitioned, but only as an equitable remedy.

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