Reldresal v. Bolgolam
High Court of Lilliput
678 Swift 2d 910 (2001)
Reldresal (plaintiff) leased property to Bolgolam (defendant) for ten years, knowing and even helping Bolgolam renovate it to open a bar and restaurant, even though the property sat in a zone where commercial use was banned (subject to a variance process Bolgolam never used). Officials didn't enforce the ban, so Bolgolam ran the business without issue until a new 1998 ordinance banned sales of alcohol over four percent, which crushed the bar's profits and dragged down the restaurant with it. Bolgolam eventually had to downsize and then close entirely, stopped paying rent, and Reldresal sued for the unpaid rent. Bolgolam argued the lease was invalid from the start for illegality, or alternatively that the 1998 ordinance frustrated its purpose. The trial court granted summary judgment for Reldresal.
Whether a lease is unenforceable when a tenant intends an illegal use known to the landlord, or when its purpose is later frustrated by a supervening illegality.