On May 17, 2023, the Second Department issued a decision in WBXB, LLC v. Rosswaag, 2023 NY Slip Op. 02708, construing a contract to avoid violating the rule against perpetuities, explaining:
An option to purchase land grants to the holder the power to compel the owner of property to sell it whether the owner is willing to part with ownership or not. If the option to purchase does not comply with the rule against perpetuities, that interest could be exercised, or vest, at a time remote to the acquisition of such right. Underlying both early and modern rules restricting future dispositions of property is the principle that it is socially undesirable for property to be inalienable for an unreasonable period of time. In New York, the rules regarding suspension of the power of alienation and remoteness in vesting—the rule against perpetuities—have been statutory since 1830. The rule against remoteness of vesting found in EPTL 9-1.1(b) provides that no estate in property shall be valid unless it must vest, if at all, not later than twenty-one years after one or more lives in being at the creation of the estate and any period of gestation involved. In no case shall lives measuring the permissible period of vesting be so designated or so numerous as to make proof of their end unreasonably difficult.
This Court must give effect to the presumption that the parties to the January 2017 agreement intended the interest to be valid. Where an agreement contains contradictory phrases, one of which is valid under the rule against perpetuities the court will adopt the construction validating the disposition. Here, paragraph 5 of the January 2017 agreement, which provided that the plaintiff shall have the right to purchase Rosswaag’s 50% interest in the premises during Rosswaag’s lifetime, was of limited duration, and thus, did not violate the rule against perpetuities.
Although the plaintiff conceded that paragraph 7 of the January 2017 agreement violates the rule against perpetuities, contrary to the defendants’ contention, the intent of the agreement can be effectuated without the offending paragraph 7 as the purchase option in paragraph 5 expressly is limited in duration.
(Internal quotations and citations omitted).