When Is There a Breach of Lease in California
The California Civil Code provides aground rules and general principles that govern a landlord tenant relationship. Any lease entered into by landlords and tenants is subject to these provisions and as such provide legal backbone to the rights and obligations of the landlord and tenant. When a tenant breaches obligations under the lease, these provisions are the tools by which the landlord can assert his or her right to sue for breach of lease, serve a three day pay or quit notice, or obtain a judgment against the tenant for damages.
At its core, a breach of lease by a tenant is a violation of a duty or the failure to perform an obligation that the tenant has assumed under the terms of the lease. Tenant obligations under the lease may include the timely payment of rent, or abiding by restrictions on the use of the premises such as smoking or keeping animals. Tenants have an implied duty to exercise reasonable care to keep the premises in good condition and safe. In addition to the obligations imposed by the lease, there are implied covenants in every lease as it relates to the relationship between landlords and tenants. These covenants include the right of possession and the covenant of habitability which requires that the premises be fit for human habitation and that the premises be free from any condition that would harm the tenant’s life, health, and safety.
Representations made by the landlord as to the condition of the premises will be subject to a tenant’s reasonable reliance. If a representation is made by the landlord as to the physical condition of the premises and the tenant relied upon that representation, then the landlord may be found in breach of the lease if the representation is not true. For example, if a landlord represented to the tenant that a hot tub at the property worked and the tenant relied upon that representation but later discovered that the hot tub did not work, the tenant would be able to terminate the lease and seek a refund of any rent paid.
If a tenant fails to abide by any of his or her obligations under the lease , the landlord is entitled to assert a claim for breach of lease. This is particularly true in the event of a material breach. A material breach affords the landlord with the right to terminate the lease and take possession of the premises. If the breach is minor in nature, the landlord may be entitled to just damages. A material breach exists only if the breach goes to the essence of the contract. A non-material breach, or one that does not go to the essence of the contract, is one that does not impact the core of the lease agreement. For example, a minor breach of a lease could be a tenant failing to mow the lawn every week, but paying his rent on time and otherwise complying with the lease.
Some of the most common types of breaches of lease include:
The California Civil Code provides that failure to pay rent is a breach of lease. It is important to note however that not all tenants are required to pay rent on the same date. The lease determines when the rent is due. More importantly, in the absence of any express provision in the lease, a tenant cannot be required to pay the rent until the rental period has terminated. For example, if a tenant is required to pay rent on the first of every month for the succeeding month, he cannot be required to pay the rent for November on October 1st because his time for paying rent has not yet arrived.
If a tenant is in material breach of a lease agreement, the landlord may be able to terminate the lease agreement and recover possession of the premises. An example of a material breach of a lease is a tenant who fails to pay the rent. Perhaps the most common form of breach involves the non-payment of rent. Under California law, to terminate a lease for non-payment of rent a landlord must serve a three day pay or quit notice on the tenant, which requires the tenant to pay the past due rent or vacate within three days. If after the expiration of the three days, the tenant has failed to remit payment or vacate, the landlord may file an unlawful detainer action.
Consequences of Breach
The consequences of lease breach can lead to termination of a lease and an eviction action against a residential tenant or affect the rights of a commercial tenant. In California, there are several bases for lease termination and eviction. California Code of Civil Procedure section 1161 (a) permits termination and eviction of residential tenants for non-payment of rent. Eviction of either residential or commercial tenants is permitted when the tenant breaches the terms of the lease, including violation of any lawful rule or regulation that is reasonable in the context of the relationship and the lease. (CCP §1161(b) & CCP §1161(4).) A lessor/landlord cannot unilaterally terminate a lease, except a month-to-month lease, unless permitted by statute. Commercial tenancies may be terminated for a material breach of insurance requirements under a lease, including the tenant’s failure to procure insurance, or if the tenant commits waste, abandons the premises, fails to pay rent, or violates a restricted use provision in the lease. (Cal. Code Civ. Proc. Section 1161(8).) If a residential or commercial tenant breaches a lease, the breach triggers an obligation on the part of the tenant to perform a restoration of the premises. In residential lease situations, a rental unit may be restored to its prior condition by the tenant without significant financial exposure because most security deposits are sufficient to cover the cost of repair or reconstruction. Where the lease permits a lessor/landlord to recoup damages by means other than the withholding of a security deposit, such as debit of rental income owed to the tenant, the tenant becomes obligated to continue paying rent. Absent evidence of lessor/landlord malfeasance, recovery is limited to security deposits or amounts provided under the lease.
What Landlords Can Do After a Breach of Lease
If a tenant is in breach of a commercial lease, the landlord is allowed to either terminate the lease or continue to perform under the same, as you may, at your option, demand all user’s rents and other sums due on the default. A commercial landlord may waive a tenant’s breach of a lease by accepting rent without protest from the tenant. However, accepting rent does not excuse a breach of a commercial lease but place the tenant in default and liable for substantial liquidated damages, sometimes, in excess of the total amount of unpaid rent.
Pursuant to California Civil Code section 1942.5, a landlord may serve a written notice to tenant giving the tenant a reasonable period of time not less than 14 days, within which to cure the subject of the notice, prior to taking action to terminate the lease. Failure to make the repairs or to give the tenant a reasonable time to cure the lease defaults is a complete defense to any unlawful detainer proceeding based on the alleged breach. A landlord, under certain circumstances, may be obligated to repair the premises under a lease agreement. If so, the landlord must comply with the reasonable time requirement in California Civil Code section 1942.5 in order to have grounds for termination under a commercial lease containing a provision requiring the tenant to maintain and repair the premises.
If the breach is not cured, a landlord may provide a notice to pay rent or quit under California Code of Civil Procedure section 1161(2), or a notice to perform covenants or quit under California Code of Civil Procedure section 1161(4). Both notices are only applicable to commercial tenancies and require that a bona fide owner or owner’s agent of the property, shall give notice thereof in writing to the tenant or person in possession, requiring performance of the conditions in the lease or agreement for not more than three days, or in the case of nonpayment of rent, weekly, monthly, or quarterly, as the case may be, or within such shorter period of time as may be provided in the lease or agreement, or in the event that a period of time is not provided in the lease or agreement, then within three days. Failure to comply with the notice to pay rent or quit, or to perform covenants or quit will allow a commercial landlord to bring an unlawful detainer action seeking to recover possession of the real property.
Civil Code section 1942.5 assumes very limited rights of a landlord to enter a commercial or residential premises for making repairs or construction work on the premises. However, under some circumstances, if downtime during repair is not permitted or unreasonable, it may occur that a commercial landlord would need to speculate and accept all risks of downtime resulting from its breach in order to enforce its legal right to enter for inspection or repairs under a lease. Any clarification of the contractual rights and remedies between landlord and tenant could be made in a separate ‘Memorandum of Caution’ concerning the landlord’s right to enter under Commercial Code section 1942.5.
Possible Defenses for Tenants
Available Defenses to a Breach of Lease by Tenant in California
In many instances, a breach of lease by tenant is not as it seems to the property owner. The tenant may not be in default or the lease provision may not be violated. Also, landlord may have failed to fulfill their obligation under the lease. In those situations, a tenant may have several defenses to the breach of lease assertion. A violation must be "substantial" before it will be considered a material breach of a lease by the tenant.
Many leases provide that a failure of a tenant to make any payment due will be grounds for termination. This type of provision is strictly construed against the landlord in California. Of course, in the absence of a specific provision in the lease, an action for breach of lease by a tenant cannot be maintained until after the amount of the rent due is fixed both as to time and as to the related amount. For example, a lease provides for rent but does not provide for when it is due. That lease will not support an action for summertime rent because the rent is not then fixed as to time.
Of course, the landlord may have failed in its duties. A landlord is required to provide and maintain residential rental units in a habitable condition. All landlords must comply with their lease obligations under California Code, §1941. The failure of a landlord to maintain the property in a habitable condition in turn gives rise to a constructive eviction by the landlord.
Not every act of a landlord which makes the dwelling un-enjoyable is a constructive eviction. A tenant’s claim of constructive eviction must establish the following:
Where the tenant is prohibited from possession or enjoyment of the premises in any substantial way, the tenant may terminate the lease contract, including any further rent obligation from the date of termination forward. The earliest entry date is the date of the first physical act by the landlord evidencing that he has dispossessed the tenant of the property, for example, by changing the lock or stacking furniture or boxes where the tenant must move them. While the acts of entering the premises by a landlord to inspect, to show prospective buyers, or to work on improvements will not generally amount to constructive eviction, a landlord who removes the tenant’s possessions from the premises without the tenant’s knowledge is committing an actionable trespass.
A tenant’s act in abandoning the premises tends to support an inference that the breach was substantial, although such an inference is rebuttable. A breach of a lease agreement which would support the landlord’s claim for past rent is not itself sufficient to justify an abandonment. In other words, whether the failure to make timely payments can reasonably be regarded as a failure of the tenant to perform his covenants in the lease terms may not depend upon the tenant’s intention. On the other hand, a tenant’s intent to abandon is not material if he did not have the opportunity to gather his personal belongings and vacate his dwelling. Constructive eviction should be judged by a standard of reasonableness based on the circumstances of each case. Modest habitation is not an occupancy of substantial discomfort and therefore not a basis for lease termination.
What to Do if You Have a Breach
There are a variety of ways to both head-off and mitigate a potential breach situation between landlord and tenant. The effective strategy for that is, in part, dictated by what kind of breach issue is being experienced. For minor issues – e.g., a lightbulb that needs changing, a small stain in the carpet, etc. – it is generally best for the landlord to simply handle the situation himself. There is no need to involve the tenant. If the tenant attempts to include himself in those simple matters – which some tenants do – that is a huge red flag that this will be a problem tenant.
If, on the other hand, the tenant is the source of the issue, then the landlord should simply notify the tenant (in writing, and perhaps even through registered mail) of the problem, and request that they rectify the situation. It is usually in everyone’s best interests to take care of the matter on the spot, rather than after the lease has terminated. If that fails, however, and the landlord must pursue the compliance issue through the courts, they are far better off if they have first sent of a notice of breach in writing, and documented it all.
If the tenant feels he has been treated unfairly by the landlord, and could do without his business , he may decide to pursue the cancellation of the lease. Although it can be financially damaging to the tenant – it will generally result in a monetary judgment against him – he could choose to cancel the lease by taking the matter to small claims court and seeking that the lease be cancelled due to breach. The court would then decide whether there has been a contract breach or not, and whether or not re-instatement of the contract is even possible or desirable. If the breach is severe, it is virtually certain that the court would agree to the cancellation, and order the tenant to pay damages. If the breach is minor, it is far less likely that the Court would cancel the lease, especially when there is a feasible solution available.
A third option to resolving a breach issue is mediation. Mediation is an alternative to arbitration and litigation. It is less formal and less prescriptive than those options, and allows each party to present his side of the situation – verbally or through the use of documents – in front of a third party, who will then facilitate a discussion between the two parties. The goal of court-based mediation is to reach an agreement, whether or not that is subsequently put in writing. If mediation fails, parties will often turn to arbitration.
California Laws and Regulations Regarding Breach of Lease
California laws imposing various obligations on the part of landlords and tenants impact landlord approaches to lease breaches. Specific California statutes and local ordinances regulate tenants and landlords in a number of ways. In some cases, these laws expand rights and remedies available to tenants. For example, Civil Code Section 1942 provides tenants with rights if a leased dwelling is uninhabitable or lacks running water. It also permits a tenant to obtain injunctive relief (as well as money damages) if repeatedly subjected to "outrageous" conduct constituting sexual harassment by a landlord, lessor, sublessor, real estate broker, appraiser, or property manager. These rights previously existed pursuant to case law but had not been codified.
Courts have imposed an implied covenant of good faith and fair dealing on every commercial lease in California. This covenant is always present in any relationship between parties to a contract. However, it is especially relevant in an implied leasing contract in which a party’s obligation is conditioned upon its discretion. Courts have held that every commercial lease imposes a duty of good faith and fair dealing on the landlord, which may in some circumstances restrict its discretionary right of renewal and replacement under the lease. This duty of good faith and fair dealing means that, generally, both parties must perform their obligations and duties stated in the lease in good faith.
California Civil Code Section 1923 outlines "the rights and remedies of lessor and lessee" and provides additional protections to tenants. California owners, property managers, and landlords should familiarize themselves with the above statutes and regulations, and with other local laws that may impose additional lease performance requirements on tenants.
Avoiding a Breach
Importantly, the best way to prevent a breach of lease is through proper communication and understanding between both the landlord and tenant about the terms of the lease so that each party is aware of their rights and obligations. In order to avoid any misunderstandings between the parties, landlords should conduct both a walk-through inspection before the tenant moves in and a walk-through inspection once the tenant moves out. The move-in inspection should be documented in writing by both the landlord and tenant and photographs as well as video of the unit should be taken to avoid any misunderstandings regarding the condition of the property and the date the tenant took possession of the premises . Once the tenant vacates the premises, the landlord should also take photographs and video of the unit to document the move out condition of the property. It is recommended that all photographs and videos be time stamped by the camera or mobile device to further confirm the date each photograph and/or video was taken. Additionally, a thorough and detailed leasing agreement that clearly sets forth what the tenant and landlord each must do in order to comply with the terms of the lease such as payment of rent, payment of utility bills, property maintenance, safety requirements, and move-in and move-out procedures is recommended. Finally, regardless of whether the parties are able to communicate properly with one another, landlords should check their local landlord/tenant ordinances to ensure that a written lease is in compliance with the law.