Hedicke V. Gunville

¶1 This appeal and cross-appeal concern a dispute about the lease with an option to buy of a residence and a 17-acre parcel of land near Cloudcroft, New Mexico. The property is owned by the Defendants-Appellants/Cross-Appellees (the Gunvilles) and was leased to Plaintiffs-Appellees/Cross-Appellants (the Hedickes). In November of 1995 the Gunvilles entered into a lease agreement with John and Sandra Hassenflu, who are not parties to this lawsuit. The lease included an option to purchase this parcel. The Hassenflus paid the Gunvilles $50,000 in two installments of $25,000, which the lease referred to as a security deposit. The lease also contained a provision to apply this $50,000 deposit towards the purchase price in the event the tenants elected to purchase the property. The term of the lease was for ten years, and called for rent payments of $1,500 per month and a total purchase price of $400,000. The Hassenflus assigned their interests in the lease and purchase option to the Hedickes in March of 1997, and the parties agreed to a monthly rental increase to $1,600 per month. The Hedickes stopped paying on June 1, 1998, and paid no rent at all through November 30, 1999. On November 23, 1999, the house on the property caught fire and was completely destroyed. After the fire, the Hedickes paid the Gunvilles $100 each month to continue to use the property for their horses until the trial court issued a writ of restitution on August 24, 2000.