Does a purchaser have a duty of inquiry as to whether a tenant has made improvements to property inconsistent with the terms of a recorded lease?

It was held in Three Sixty Five Club v. Shostak, supra, 104 Cal.App.2d 735, 232 P.2d 546, that where the tenant made improvements to property inconsistent with the terms of a recorded lease, pursuant to another, unrecorded agreement which gave the tenant rights additional to those granted in the lease, the purchaser had a duty of inquiry as to the additional rights, and notice was implied.

In that case, the owner of a four-story building leased the second, third, and fourth floors to the plaintiff's predecessors-in-interest, subject to the owner's option to lease back the second floor. The plaintiff obtained the owner's oral waiver of this option and subsequently improved portions of the second floor. The lease containing the owner's option to lease back was recorded, but the owner's waiver thereof was not, and the defendant subsequently purchased the building. The court held the plaintiff-tenant's obvious improvement of the area due to be leased back to the owner and occupation of the area beyond the premises described in the lease created inconsistencies "between the apparent possession of the tenant and the terms of the recorded lease to put upon the purchaser the duty of making a [214 Cal.App.3d 370] reasonable inquiry as to rights of the tenant not included in the lease." (Three Sixty Five Club v. Shostak, supra, 104 Cal.App.2d 735, 739, 232 P.2d 546.) Similarly, in Dreyfus v. Hirt, supra, 82 Cal. 621, 23 P. 193, a lessee's possession, which visibly exceeded the terms of a recorded lease, was held to give notice of the provisions of a subsequent unrecorded lease. (Id., at p. 626, 23 P. 193.) These cases do not hold that a purchaser has a duty to inquire where the lessee is in possession pursuant to, and consistent with, the terms of a recorded lease.