L.P. v. State of Cal. CA2/3
The State of California (State) entered into a 20-year lease agreement (lease) regarding real property (property) owned by 5401 Associates, L.P. (Landlord) that contained a provision allowing the State to convert the lease to a lease with purchase option (lease-option) agreement and purchase the property for $1 at the end of the lease term. The State occupied the property for the full lease term and attempted to make the conversion and exercise the purchase option. But Landlord refused to sell the property, claiming the State did not fully comply with certain lease provisions relating to the conversion of the lease. Those provisions require compliance with Government Code section 14669 which, in turn, requires the State to obtain specific authorization from the Legislature and engage in a competitive bidding process before entering into a lease-option agreement.
Landlord filed a complaint alleging the State breached the lease and sought declaratory relief to the effect that the sale of
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