Security Deposits As Liquidated Damages

Cal. Civ. Code § 1671 governs liquidated damages in a contract for real property (i.e., a residential or commercial lease) and states in pertinent part: “a provision in a contract liquidating damages for the breach of the contract is void except that the parties to such a contract may agree therein upon an amount which shall be presumed to be the amount of damage sustained by a breach thereof, when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage.” (Emphasis added.) Cal. Civ. Code § 1950.5 governs security deposits and provides for the manner with which a landlord may apply a security deposit. A reasonable interpretation of both statutes would suggest that a liquidated damages provision may be added to a lease agreement in contemplation of potential damages or a breach wherein the scope and amount of resulting damage cannot be reasonably anticipated by the contracting parties. Thus, a liquidated damages provision triggered by a repair related breach may not be enforceable if the cost or amount of repair is readily anticipated by the contracting parties upon execution.

If you are a Landlord in Los Angeles and have a Residential or Commercial Lease inquiry, contact one of our Los Angeles Real Estate Attorneys today for a free consultation and case evaluation.

Landlords – A Tenant’s Email Address Should Be Included In A Lease Agreement

Lease agreements should include a tenant’s email address.  There are many practical reasons for capturing a tenant’s email.  One in particular is for purposes of notifying a former tenant of abandoned property.  If the former tenant provided the landlord with the tenant’s email address, the landlord may also send abandonment notices by email and comply with the statutory requirements. See Cal. Civ. Code § 1983.  While an email may not substitute for the notice provisions in a lease, the parties may certainly mutually agree to receiving notice via email.

Landlords – Certain Unlawful Detainer Proceedings May Be Consolidated With Other Civil Actions

The expedited procedural framework for unlawful detainer cases is necessary to prevent frustration of the summary proceedings by the introduction of delays and extraneous issues. See Vasey v. California Dance Co., (1977) 70 Cal. App. 3d 742, 747. Therefore, a UD under C.C.P. § 1161 will only be interrupted by consolidation with a civil action where complex issues of title exist. See Martin-Bragg, (2013) 219 Cal. App. 4th 367, 393; see also Mehr v. Superior Court, (1983) 139 Cal. App. 3d 1044, 1049; see also Asuncion v. Superior Court (1980), 108 Cal. App. 3d 141, 145.

In Martin-Bragg, a property owner filed an unlawful detainer action against a tenant for failure to pay rent. See Martin-Bragg supra, 219 Cal. App. 4th at 371. The tenant subsequently filed a civil quiet title action against the property owner, alleging that he was the true owner of the property, and that due to a complex personal relationship with the property owner “he had caused title to the property to be transferred to her, with the understanding that she would hold it in trust for him.” Id. at 372. The Court concluded that the complex issues of title raised by the tenant required a departure from the summary procedures of the unlawful detainer action. Id. at 395.

In Mehr, an unlawful detainer action was filed by the purchaser of a property at a trustee’s sale. See Mehr supra, 139 Cal. App. 3d at 1046. The defaulted borrowers filed a separate civil case, alleging that the foreclosure sale was void because the foreclosure trustee and its attorneys, along with others, conspired with the purchaser to obtain possession of the property by unlawful means. Id. at 1049-1050. The borrowers alleged that they were lulled into believing they could exercise their right of redemption on August 14, but the sale occurred without their knowledge on August 13, and the property was awarded to the sole bidder for an inadequate price. Id. at 1050. In ordering a writ of mandate granting the borrowers’ motion for stay of execution of the post-judgment writ of possession pending appeal, the Court ruled that the fact-intensive question of fraudulent acquisition of title was not fully litigated at the unlawful detainer trial. Id.

In Asuncion, a hard money lender paid off a delinquent second mortgage and other debts of two borrowers in exchange for a grant deed to the property, subject to a 45-day option for the borrowers to reacquire the property by executing a promissory note in favor of the lender on very unfavorable terms. See Asuncion supra, 108 Cal. App. 3d at 143-144. Upon the expiration of the option, the lender recorded the grant deed and immediately commenced unlawful detainer proceedings. Id. at 144. The borrowers filed a separate civil action seeking to quiet title and alleging fraud, usury, unfair business practices and truth in lending violations. Id. at 143. The Court found that the title issues raised by the borrowers were sufficient to merit either a stay of the eviction proceedings pending adjudication of the title issues, or consolidation of the actions. Id. at 146-147.

Thus, short of complex title issues raised as a defense to an unlawful detainer action, Evictions would likely not be consolidated with a civil action. If you are a landlord and are seeking to evict a tenant, contact one of our Los Angeles Eviction Attorneys today for a free consultation and case evaluation.

Landlords – Certain Lessee Rights Cannot Be Modified Or Waived

There are certain rights which cannot be waived by a tenant even though that tenant might agree and put said waiver or modification in writing. Under Cal. Civ. Code § 1953, certain rights agreed waived or modified by a tenant shall be void and contrary to public policy including: (1) A tenant’s rights or remedies under Sections 1950.5 (security deposit) or 1954 (entry by landlord); (2) His right to assert a cause of action against the lessor which may arise in the future; (3) His right to a notice or hearing required by law; (4) His procedural rights in litigation in any action involving his rights and obligations as a tenant; (5) His right to have the landlord exercise a duty of care to prevent personal injury or personal property damage where that duty is imposed by law.

If you are a landlord and have a question regarding your residential or commercial lease, contact one of our Lease Attorneys in Los Angeles for a free consultation or case evaluation.

Single Family Residence Generally Not Subject To LA Rent Control

Under L.A.M.C. § 151.02, the term “rental unit” excludes the following “Dwellings, one family, except where two or more dwelling units are located on the same lot.  This exception shall not apply to duplexes or condominiums”.  Under L.A.M.C. § 12.03 a “Dwelling Unit” is defined as “A group of two or more rooms, one of which is a kitchen, designed for occupancy by one family for living and sleeping purposes.”  Thus a “One-Family Dwelling Unit” for purposes of rent control is defined as a detached single family residence.  The question of whether a particular rental unit is subject to rent control becomes a bit unclear when guest houses are rented out.  A simple test for landlords to use as a guide is whether such a “guest house” has a kitchen.  Landlords and homeowners renting out a guest house with a kitchen should probably contact LA Housing to determine whether their rental unit is subject to rent control before an eviction action is filed or contemplated.  If you are a landlord in Los Angeles facing the possibility of evicting a tenant, contact one of our Los Angeles Eviction Attorneys for a free consultation and case evaluation.

Landlords Faced With Illegal Entry Issues – The Forcible Detainer

C.C.P. § 1160 governs Forcible Detainer Actions which defines the taking of possession as follows:

1) By force, or by menaces and threats of violence, unlawfully holds and keeps the possession of any real property, whether the same was acquired peaceably or otherwise; or, 2) Who, in the night-time, or during the absence of the occupant of any lands, unlawfully enters upon real property, and who, after demand made for the surrender thereof, for the period of five days, refuses to surrender the same to such former occupant. The occupant of real property, within the meaning of this subdivision, is one who, within five days preceding such unlawful entry, was in the peaceable and undisturbed possession of such lands. A person may be an “actual occupant,” and have undisturbed possession of premises within five days preceding an actual entry, as required by Forcible Entry Act 1866, Stats.1866, p. 768, § 3, without the actual presence of himself or any person in his behalf. See Wilson v. Shackelford, (1871) 41 Cal. 630.

If you’re an owner or a landlord and someone has gained possession by force, or in the absence of your occupancy, then you must first serve a 5 day notice prior to filing the forcible detainer action. If faced with the proposition of filing a forcible detainer action under C.C.P. § 1160 contact one of our Los Angeles Eviction Attorneys today for a free consultation and case evaluation.

Commercial Evictions – Partial Payments Under C.C.P. § 1161.1

Partial payments received by Commercial Landlords during eviction actions or before a commercial unlawful detainer is filed is not uncommon. The receipt of a partial payment does not waive a landlord’s right to pursue the eviction and at a minimum, the Pay Rent or Quit notice should state the same. With respect to seeking the difference owed, C.C.P. § 1161.1(b) requires that the landlord specify the demand for partial payment in the complaint if received prior to filing. “If the landlord accepts a partial payment of rent, including any payment pursuant to subdivision (a), after serving notice pursuant to Section 1161, the landlord, without any further notice to the tenant, may commence and pursue an action under this chapter to recover the difference between the amount demanded in that notice and the payment actually received, and this shall be specified in the complaint. (Emphasis added.) As follows, if partial payment of rent is received after filing the complaint, the landlord is entitled to amend the complaint without prior leave of court and without delay to the expedited eviction proceeding. See C.C.P. § 1161.1(c).

If you are a commercial landlord facing the prospect of evicting a commercial tenant, contact one of our Los Angeles Commercial Eviction Attorneys today for a free consultation and case evaluation.

What Happens to a Landlord’s Eviction Action When Possession Is No Longer At Issue

Pursuant to Cal. Civ. Code § 1952.3, if the lessor brings an unlawful detainer proceeding and possession of the property is no longer in issue because possession of the property has been delivered to the lessor before trial or, if there is no trial, before judgment is entered, the case becomes an ordinary civil action. At this point, the landlord may continue with the civil damages action but is limited to recovering only those damages allowable in the unlawful detainer action (unpaid rent earned at the time of termination), unless the landlord elects to amend the complaint so that possession is no longer at issue and state a claim for damages. To seek damages arising from the unpaid rent for the balance of the term of lease, the Landlord must amend the complaint.

If you are a landlord in Los Angeles and have an issue with a tenant, contact one of our Los Angeles Eviction Attorneys for a free consultation and case evaluation.

Commercial Evictions – Relief From Automatic Stay Upon Tenant’s Bankruptcy Filing

When a commercial tenant who is (or is going to be )a defendant in an unlawful detainer action files a petition for bankruptcy, upon the filing of the petition, an automatic stay takes effect and the state court eviction action is stayed until the stay is lifted.

In a commercial lease setting there is one exception to the automatic stay and that is where the commercial lease term has terminated by expiration of its stated term before the bankruptcy filing. See 11 U.S.C. § 541(b)(2). Thus, there would be no stay in proceedings if an eviction action was commenced to regain possession of a commercial space wherein the lease term has already expired.

If the lease term has not expired and the eviction proceedings have commenced, then the commercial landlord’s attorney would be required to go into bankruptcy court and seek relief from the automatic stay by filing a Motion For Relief From Automatic Stay. The conditions for relief requires a showing that the landlord’s interests are not adequately protected through the bankruptcy action, or that the tenant debtor has no equity in the property and the property itself is not necessary for an effective reorganization. See 11 U.S.C. § 362(d).

Once the bankruptcy court has granted relief from the automatic stay, the landlord may go back into state court and complete the eviction action.

If you’re a commercial landlord seeking possession of the commercial premises and have a tenant in bankruptcy, contact us for a free consultation and case evaluation.

Eviction Actions – Calculating Notice Periods

The prerequisite to any eviction action in Los Angeles is the proper service of the three day notice to pay rent (or cure breach) or quit. Service must be made either personally on the tenant or posted to the door and mailed. As important for landlords is the proper calculation of the three day notice period. Pursuant to California Civil Jury Instruction No. 4303, The three day notice period begins the day after the notice was given to the tenant or delivered to the premises and if the last day falls on a Saturday, Sunday or holiday, the tenant’s time to pay the rent or vacate the property is extended to include the first day after the Saturday, Sunday or holiday that is not also a Saturday, Sunday or holiday.

Failure by a landlord to adhere to these rules may result in a failed eviction action. If you are a landlord and need to evict a tenant or initiate an eviction action, call or email one of our Los Angeles Eviction Attorneys today for a free consultation and case evaluation.