The Virginia Supreme Court recently found a 15-year lease unenforceable because it was not executed with the formalities of a “deed” in accordance with Virginia law.
Game Place, L.L.C. v. Fredericksburg 35, LLC, 813 S.E.2d 312 (Va. 2018) concerned a retail tenant that vacated its premises and attempted to terminate its lease prior to the expiration of a 15-year term. The landlord sued the tenant and its guarantor for unpaid rent. At trial, the tenant argued the lease was unenforceable because it was not in the form of a “deed” as required by Section 55-2 of the Virginia Code (also known as the “Statute of Conveyances”).
The trial court ruled in the landlord’s favor, emphasizing “substance over form” and finding that the lease met the requirements of a deed because, among other things, it was a lengthy (17-page) document that exemplified a sealed instrument and could just as easily have been called a “deed” or “indenture.” On appeal, the Virginia Supreme Court disagreed, overruling the trial court and finding that the formal requirements of the Statute of Conveyances must be satisfied in order for a lease of more than five years to be valid.
The Statute of Conveyances provides in relevant part that “[n]o estate of inheritance or freehold or for a term of more than five years in lands shall be conveyed unless by deed or will” (emphasis added). At common law, a “deed” was required to contain a wax-imprinted seal or a scroll. However, the Virginia legislature has expressly delineated several acceptable substitutes for a formal seal, all...
