Byke Construction Co. v. Miller
In Byke Construction Co. v. Miller, 140 Ariz. 57, 58-60, 680 P.2d 193, 194-96 (App. 1984), the Court held that an option to repurchase real property that did not specify a time period to exercise the option did not violate Arizona's rule against perpetuities. Id. at 59, 680 P.2d at 195.
The Seller, Byke Construction, sold real property to the Buyers. Id. at 58, 680 P.2d at 194.
The escrow instructions included an option allowing Byke to repurchase the property. The exact language was:
Buyer agrees to begin house construction on the subject property on or before May 1, 1979. Should Buyer fail to begin construction on or before such date, Seller shall have the right to buy back the subject property at a purchase price equal to the net proceeds paid Seller at close of this escrow. Id.
The Buyers did not begin construction by May 1, 1979. Id.
Almost two years later Byke wanted to repurchase the property pursuant to the option. Id.
The Buyers refused to reconvey the property, arguing the option provision was void under the rule against perpetuities. Id.
The trial court granted summary judgment in favor of the Buyers, finding that the option provision was void because it violated the rule against perpetuities. Id.
Byke appealed and argued that "because no time period is specified, the court must assume the parties intended a reasonable time period to apply, and that a reasonable time period is less than twenty-one years." Id. at 58-59, 680 P.2d at 194-95. We agreed. Id. at 59, 680 P.2d at 195.