Buoy v. Chatham County Bd. of Tax Assessors, 53459
| Decision Date | 06 April 1977 |
| Docket Number | No. 53459,No. 1,53459,1 |
| Parties | T. A. BUOY et al. v. CHATHAM COUNTY BOARD OF TAX ASSESSORS |
| Court | Georgia Court of Appeals |
Lee & Clark, Fred S. Clark, Savannah, for appellants.
Anton F. Solms, Jr., Leonard W. Childs, Jr., Savannah, for appellee.
In 1969, a "lease" for fifty years was entered into between the Savannah Airport Commission, as lessor, and the appellants as lessee, which provided for the construction and operation of a motel on public land by the appellants.
The sole question for determination is the taxability of appellants' interest in the property.
If an instrument grants an estate for years or a leasehold estate it is taxable as realty. Delta Air Lines Inc. v. Coleman, 219 Ga. 12, 131 S.E.2d 768. On the other hand, if only a license to use is granted, this is a usufruct, which is not taxable. Whitehead v. Kennedy, 206 Ga. 760, 58 S.E.2d 832. Where the term of the lease is for more than 5 years a presumption arises that a leasehold estate was created. Warehouses, Inc. v. Wetherbee, 203 Ga. 483, 46 S.E.2d 894. As the lease here was for a term of 50 years, presumptively an estate for years was created. Appellants contend that the conditions and terms of the lease impose restrictions and limits on the use of the property which will negative a conveyance of a leasehold estate and accordingly their interest in the property could only constitute a usufruct or license. Thus the terms of the lease must be examined in order to determine if this presumption was overcome. The lease granted to lessee, the "exclusive use" of described land for a 50 year term on which the lessee agreed to construct a motel. It also gave the lessee the right to mortgage its "leasehold rights" in connection with the obtaining of permanent financing of the motel building and the improvements. Most importantly the lease provided that the lessee would pay ". . . all real estate taxes and assessments, if any levied, against improvements erected by the lessee on the lands of the lessor . . .." If only the grant of a usufruct was intended then it would be unnecessary to impose a condition or duty on the lessee to pay any real property taxes on the improvements for if it were a mere usufruct there would be no real property taxes. The foregoing provisions are strong indications that the grant of a leasehold estate was intended by the parties. However, there are more indicia that the appellants acquired a leasehold interest for they were required to repair and maintain the premises, provide broad insurance...
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