Tag: Commercial Lease Attorney Los Angeles; Los Angeles Commercial Lease Lawyer; Commercial Lease Landlord Attorney; Commercial Eviction Attorney Los Angeles

On an eviction for the failure to pay rent, the lease terminates at the point when the unlawful detainer complaint has been filed.  Thus, upon a notice to pay rent or quit which expires and at the point an eviction action is filed, the lease, as a matter of law terminates. See In re Windmill Farms, 841 F.2d 1467, 1471 (9th Cir. 1988).

Often times, Tenants, when facing an eviction action, seek relief from forfeiture pursuant to C.C.P. § 1179.  This requested relief usually comes up in Bankruptcy proceedings where a landlord seeks relief from the automatic stay, and if the Lease has any value, a trustee will likely oppose the stay relief so as to assume and assign the lease.

Section 1179, which a Tenant can avail itself of, is clear: “In no case shall the application or motion be granted except on condition that full payment of rent due, or full performance of conditions or covenants stipulated, so far as the same is practicable, be made.  Id; see also Gill Petrolium, Inc. v. Hayer, (2006) 137 Cal. App. 4th 826, 833 (“So long as the court imposes the statutory conditions, the full payment of rent due or full performance of conditions or covenants so far as practicable, the court has broad equitable discretion to determine the conditions upon which relief will be granted”) (Emphasis added.)

Cal. Civ. Code § 3275 carries the same condition of forfeiture. See Cal. Civ. Code § 3275 (“Whenever, by the terms of an obligation, a party thereto incurs a forfeiture, or a loss in the nature of a forfeiture, by reason of his failure to comply with its provisions, he may be relieved therefrom, upon making full compensation to the other party, except in case of a grossly negligent, willful, or fraudulent breach of duty.”); see also Kelley v. Olympic Pharmacy, 144 Cal. App. 2d 43, 54 (Refusal of trial court to grant lessees relief against forfeiture was not an abuse of discretion, where there were many violations of the lease, and absence of an unequivocal and positive tender of all rents due.); see also Cambridge v. Webb, (1952) 109 Cal. App. 2d Supp. 936, 938 (Affirming trial court’s exercise of discretion denying tenant relief from forfeiture under Section 1179 where tenant failed to pay rent for five months.)

If you are a commercial landlord and are dealing with a tenant seeking relief from forfeiture, contact one of our commercial lease attorneys for a free consultation and case evaluation.

Our Los Angeles Eviction Attorneys were recently asked to research and brief an issue regarding when a tenancy actually legally terminates for nonpayment of rent.  The Ninth Circuit Court of Appeal addressed this issue in Vanderpark Properties, Inc. v. Buchbinder (In re Windmill Farms, Inc.) 841 F2d 1467 (9th Cir. 1988).  The Vanderpark Court held that “under California law a lease terminates for nonpayment of rent at least by the time the lessor files an unlawful detainer action, provided that a proper three-days’ notice to pay rent or quit has been given, and the lessee has failed to pay the rent in default within the three-day period . . . .” Id. at 1471.  Thus, once a landlord has properly served a notice to pay rent or quit, and tenant fails to cure, and subsequently files an Unlawful Detainer action, as a matter of law, the lease has been terminated.

This issue is relevant to landlords who during the eviction process, are then faced with a tenant filing bankruptcy.  The question becomes whether the bankruptcy trustee has any claim or equity in the leased premises and bankruptcy courts have held that they do not. See In re Flexipak, Inc., 49 B.R. 641, 642-643 (S.D.N.Y. 1985) (stay relief granted because debtor not regarded as having any equity in leased premises).

If you are a commercial landlord dealing with an eviction and a subsequent bankruptcy, contact one of our Los Angeles Commercial Lease Attorneys for a free consultation and case evaluation.

As with all California contracts, there is a standard of good faith required by all parties. This standard of good faith comes into play when commercial landlords are asked by their tenants to consider a lease assignments. Most form commercial lease contracts (such as the AIR form commercial leases) provide language regarding good faith in accepting or rejecting a potential assignee, starting with the notion that a landlord’s consent shall not be “unreasonably withheld.”

Landlords and tenants are free to further define what constitutes reasonable or unreasonable withholding of consent beyond the boilerplate language found in most form leases. Landlord and tenant may choose to include factors such as an assignee’s experience, character, reputation, credit history and net worth.

It is important to note for Landlords that the issue of whether consent was reasonably or unreasonably withheld will be a question of fact for a jury. Thus, in anticipation of litigation, a landlord should have fact based reasons for withholding consent and those fact based reasons should be carefully scrutinized.

Our Firm currently represents a landlord who rented to a medical marijuana business for about a year. The landlord was named as a defendant in a lawsuit (one of several) currently pending in the Los Angeles County Superior Court. The City alleged violations of California’s Unfair Competition laws and also Prop D violations. Part of the City’s prosecution against the Landlord included the filing of a lis pendens.

Shortly after the City filed, our landlord evicted the medical marijuana tenant and has since rented to a non-marijuana business. Despite these facts, the City refused to remove the lis pendens. After filing a motion to expunge the lis pendens and oral arguments, the Court granted landlord’s petition and ordered that the lis pendens be expunged.

Case law supports the expungement wherein the offending or violating conduct has ceased. Despite the ruling, it is anticipated that the City will appeal the decision given the unfavorable precedence set by the trial court.

Landlords of marijuana businesses, be mindful about the potential for civil and criminal prosecutions by the City. Although this issue is both of political and social concern, the City Attorneys, at least in our case, are not sympathetic to a landlord, even when the landlord has fully complied and remains compliant. The City is currently aggressively seeking civil penalties despite the premises being marijuana free for several months and under a lease to a non-marijuana business for years to come.

If you are a commercial landlord and in need of a Commercial Lease Attorney, contact us for a free consultation and case evaluation.

Cal. Civ. Code § 1950.7 governs security deposits for commercial leases and the disposition thereof after the termination of tenancy whether voluntarily or by eviction. Section 1950.7 limits the manner with which a Landlord may apply the security deposit. However, California Courts will uphold a Section 1950.7 waiver should the landlord and tenant agree to the same. Thus, with a waiver, Landlord could effectively apply security deposit to future rent for example, even though 1950.7 would prohibit such an application. See 250 L.L.C. v. Photopoint Corp. (USA), (2005) 131 Cal. App. 4th 703, 718 (“That conclusion is consistent with cases holding that commercial tenants may waive their rights under the Civil Code …and with California’s public policy of ‘enable[ing] and facilitate[ing] freedom of contract by the parties to commercial real property leases.’ Since the Legislature has expressly prohibited waivers of section 1950.5’s protections for residential security deposits…its failure to do so with respect to commercial security deposits indicates that waivers are permissible as to those deposits.”) (Internal citations omitted.) (Emphasis added.)

If you are a Commercial Landlord in Los Angeles and have questions or concerns regarding your commercial lease, contact one of our Commercial Lease Attorneys for a free consultation and case evaluation.

Landlords in Los Angeles who are leasing their properties to Medical Marijuana Business need to be mindful of the very real chance that the City Attorney will also name the Landlord as a defendant in Prop D civil complaints, as well as criminal prosecutions. Medical Marijuana Businesses are illegal pursuant to LAMC 45.19.6.2. However, certain immunities are available to Prop D compliant collectives/dispensaries. Of those Marijuana Businesses that are not Prop D complaint, the City Attorney is currently pursuing both criminal and civil prosecution. What this means to a Landlord renting to a Marijuana business not compliant with Prop D, is that the landlord could be also named as a defendant pursuant to LAMC 45.19.6.2 and subject to civil penalties (up to $2,500 per day) and also faced with injunctions and clouds on title from a lis pendens filed by the City.

If you are a Landlord in Los Angeles facing a civil matter stemming from your lease to a Marijuana Business, contact one of our Commercial Lease Attorneys for a free consultation and case evaluation.

Under existing law listing and selling agents are required to provide the seller and buyer in a residential one to four unit real property transactions, including a lease of more than one year, with a prescribed disclosure form containing general information on real estate agency relationships. Existing law also requires the listing or selling agent to confirm their agency relationship by disclosing to the buyer and seller whether he or she is acting as the buyer’s agent exclusively, the seller’s agent exclusively, or as a dual agent representing both the buyer and the seller.

This agency disclosure is extremely important because California Law imposes on real estate agents and brokers a duty to act with the utmost good faith in the best interests of their clients. Thus, a real estate client is owed a duty of good faith, loyalty, honesty, reasonable care and fair dealing.

Effective January 1, 2015, this law is extended to include transactions involving the sale or lease for more than one year of commercial real property. Commercial property as defined includes vacant land, industrial property or any residential property, even if containing more than four dwelling units.

SB 1171 (codified as Civil Code §2079.13) (effective January 1, 2015).

Commercial Landlords, be advised that the commercial lease governing the tenancy of your commercial income property is considered an “asset” that is subject to the Bulk Sales Laws which govern the sale of certain businesses, such as restaurants for example. See Cal. Com. Code § 6102(a)(1)(ii). Thus, a commercial tenant seeking to sell a business, including his/her interest in a commercial lease must list the commercial landlord as a claimant in the event back rent is owed. If a commercial tenant in a sale governed by the Bulk Sales Law owes back rent, the landlord would then be a creditor subject to the Bulk Sales Laws. Commercial landlords with claims on a commercial lease in a sale governed by the Bulk Sales law would hold an unsecured claim which is lowest in terms of priorities in terms of distribution considerations. See Cal. Com. Code § 6106.4(b).

If you are a commercial landlord or a commercial tenant with questions regarding your commercial lease, contact one of our Los Angeles Commercial Lease Attorneys today for a free consultation and case evaluation.

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.