Three Day Notices in a Commercial Eviction

Commercial evictions can be different from residential evictions in many ways. One very important difference is that in a commercial eviction, a landlord may accept a partial rent payment after a Three Day Notice is served on a tenant and still continue with an unlawful detainer. However, the landlord must provide the tenant prior notice that acceptance of a partial rent payment will not constitute a landlord’s waiver to obtain possession.

Another very important distinction for a commercial eviction using a Three Day Notice is the use of a CCP Section 1161.1 notice that allows for an “estimated rent demand.” Under Section 1161.1, a Three Day Notice served on a commercial tenant for nonpayment of rent can state an estimated amount due as long as the amount is “reasonably estimated” and “clearly identified” by the notice. This important distinction for commercial tenancies allows for a Three Day Notice to be served when the actual rent is unknown, such as a percentage rent or when CAM charges are due as part of the rent.

It is important to distinguish commercial and residential evictions because in a residential eviction, a Three Day Notice must state the exact amount of rent due. Although in a commercial eviction, a Three Day Notice may state the exact amount due similar to a residential eviction, the Code of Civil Procedure also allows for a Three Day Notice demanding an “estimated rent demand.”

Attorney Anthony Marinaccio can provide guidance in a commercial eviction. Please contact me at (818) 839-5220 or at my website at www.marinacciolaw.com.

Landlord Must Disclose Notice of Default to Prospective Tenants

Starting on January 1, 2013, any landlord who rents a unit on property containing one to four units must disclose to prospective tenants any receipt of a notice of a default if it has not been rescinded. The landlord must disclose the notice of default prior to executing the lease or rental agreement.

Violation of the law can be costly. If violated, the tenant can void the lease and recover one month’s rent or twice the amount of actual damages, whichever is great, and any prepaid rent. If the foreclosure has not occurred, the tenant may deduct one month’s rent from future rent owed.

The statutory notice as required by Civil Code Section 2924.85 must be in English, Spanish, Chinese, Vietnamese, Tagalog, and Korean. Pursuant to Section 2924.85, the notice must state:

“The foreclosure process has begun on this property, and this property may be sold at foreclosure. If you rent this property, and a foreclosure sale occurs, the sale may affect your right to continue to live in this property in the future. Your tenancy may continue after the sale. The new owner must honor the lease unless the new owner will occupy the property as a primary residence, or in other limited circumstances. Also, in some cases and in some cities with a “just cause for eviction” law, you may not have to move at all. In order for the new owner to evict you, the new owner must provide you with at least 90 days’ written eviction notice in most cases.”

A property manager is not liable under Section 2924.85 unless the landlord told him or her of the notice of default and directed the property manager to tell prospective tenants.

Failure to Maintain Renter’s Insurance Not a Material Breach Under Residential Rental Agreement and Los Angeles Rent Stabilization Ordinance

In a recent decision by the Court of Appeal, a landlord was unable to evict a tenant who did not have renter’s insurance as required by her rental agreement. This decision has important implications for landlords in the City of Los Angeles, subject to the Los Angeles Rent Stabilization Ordinance. A copy of the decision, Nivo 1 LLC v. Amiteria Antunez can be found here.

On May 29, 2012, the Landlord filed an unlawful detainer against the Tenant for failure to pay rent and for failing to have renter’s insurance. The Landlord had served two Three Day Notices — one for the failure to pay rent and one for the failure to have renter’s insurance. The  Tenant’s unit was subject to the Los Angeles Rent Stabilization Ordinance, also known as rent control.

The rental agreement entered into between the Landlord and Tenant contained a provision that required the Tenant to have a renter’s insurance policy to insure the Tenant’s personal possessions. In 2011, the Landlord served the Tenant with  a Notice of Change of Terms of Tenancy stating that any breach of a rental agreement would be a material breach. In her Answer, the Tenant stated that she never had renter’s insurance since she moved into the unit in 1998.

At the unlawful detainer trial, the court found that the Tenant did not materially breach the rental agreement. Landlord appealed the trial court’s decision.

The Los Angeles Rent Stabilization Ordinance prohibits a landlord from filing an unlawful detainer based on a unilateral change in terms of tenancy. The original terms of the rental agreement merely stated that failure to have renter’s insurance would result in a waiver of the Tenant’s rights to seek damages from the Landlord if there was damage to the Tenant’s personal property. The 2011 modification changed the terms so that a failure to maintain renter’s insurance would be a material breach of the rental agreement.

Under the Los Angeles Rent Stabilization Ordinance, the 2011 amendment was invalid to go forward on an unlawful detainer because it was a unilateral change. There was no agreement between the Landlord and the Tenant because the Landlord merely served a Notice of Changes of Terms of Tenancy.

Further, the Court found that failure to maintain renter’s insurance was not a material breach. In order to prosecute an unlawful detainer for a breach of the rental agreement, the breach must be material, meaning substantial or total, in order for a tenant to be evicted as a result. The Court viewed a provision requiring renter’s insurance protects the tenant more than the landlord. In addition, the Landlord was only selectively enforcing the provision against some tenants.

This case provides some insight into the complexity of filing an unlawful detainer against a tenant who lives in a unit subject to the Los Angeles Rent Stabilization Ordinance. This case further highlights what is a material breach that could cause an eviction. It is important to note that there were two issues. The first was whether the 2011 amendment was valid. The second was whether failing to maintain renter’s insurance was a material breach.

Attorney Anthony Marinaccio handles unlawful detainers and is knowledgeable in rent control laws. Please contact me at (818) 839-5220 or through his website at www.marinacciolaw.com for a free initial consultation. My office is centrally located in Glendale, California and I am available throughout Los Angeles County. 

Prohibiting Jury Trials is an Unenforceable Clause in a Rental Agreement

I have recently come across some older leases and rental agreements that have provided that jury trials are prohibited. Generally these clauses in the lease or rental agreement read that a tenant cannot request a jury trial in any lawsuit between the landlord and tenant.

These clauses are unenforceable in California. Although the two parties – the landlord and tenant – agreed to such a provision, a California court will not enforce it. Jury trials for unlawful detainers, or evictions, are becoming more common. I have recently come across many landlords who believe a clause prohibiting jury trials would be enforceable; however, as a right, a tenant can require a jury trial for an unlawful detainer, or eviction if done within the required time and manner as required by the courts.

It is important that a lease or rental agreement have clauses that are enforceable under the law. As laws change, so must leases and rental agreements. It is important that a lease or rental agreement that a landlord uses be current to the law. A landlord can also amend a lease or rental agreement to keep it current if the unit is in a jurisdiction not controlled by rent control.

Attorney Anthony Marinaccio drafts leases and rental agreements for residential and commercial properties. Please contact Mr. Marinaccio at (818) 839-5220 or through his website at www.marinacciolaw.com for more information.

When does a lease need to be in a foreign language?

Landlords who negotiate with a residential tenant primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean must provide a lease, sublease, rental agreement, or other term of tenancy contract or agreement for more than a one month period a foreign language translation of the contract or agreement prior to anyone signing the agreement. Civil Code Section 1632(b) provides specifics as to when a foreign language translation of a rental agreement must be done and when there can be an exception.

An exception exists when a residential tenant has his or her own interpreter. The interpreter must be an adult able to fluently speak and read in English and the foreign language. Further, the interpreter cannot be an employee or provided for by the landlord.

If a translated document is not provided pursuant to Civil Code Section 1632(b), the rental agreement can be rescinded and voided. Therefore, it is important if as a landlord you are negotiating a lease in Spanish, Chinese, Tagalog, Vietnamese, or Korean and you use an agreement written in English, the landlord must provide a translation of the agreement prior to signing any agreement.

If you need assistance in a rental agreement, please contact Anthony Marinaccio at (818) 839-5220 or through his website at www.marinacciolaw.com.