We’ve received some recent inquiries from commercial landlords in Los Angeles asking about acceptance of partial payments and waivers and what a landlord’s rights are with respect to making a claim for the difference at a later time, whether through a notice of non-payment or an unlawful detainer action.
As with all commercial lease disputes, written notices of the express intent of the parties is essential. The California Court of Appeal in Woodman Partners v. Sofa U Love, (2001) 94 Cal. App. 4th, 766, held that a letter to a tenant that the landlord was accepting tenants’ partial rent subsequent to acceptance of the payment would not satisfy the notice requirements of C.C.P. § 1161.1(c). Id. at 569. Thus, when a tenant is notified that acceptance of partial rent does not constitute waiver of any rights prior to the acceptance of the partial payment, then such actual notice is valid. Id.
Therefore, a provision in a commercial lease stating that “acceptance of rent hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of any provision hereof, other than the failure of Lessee to pay the particular rent so accepted” satisfied the statutory requirement of prior actual notice that payment did not constitute waiver of any rights or defenses. Id. at 569-570.
Accordingly, commercial landlords are well advised to ensure that their written commercial lease has such a partial payment no-waiver provision in their contracts. AIR commercial lease and CAR commercial lease forms have such standard provisions. If you are a commercial landlord or tenant and you have a commercial lease dispute, contact one of our Commercial Lease Attorneys in Los Angeles for a free consultation and case evaluation.