As seen in our most recent Fundamentals of Evictions webinar, California law affords heavy protections to residential tenants in unlawful detainer actions. Not all of those protections are given to commercial tenants based on the presumption that they are more sophisticated and experienced in negotiating contracts. Also, given the fact that commercial leases are not for a person’s place of living, there is a presumption that commercial tenants do not share the same unique concerns as residential tenants before entering into a lease. Below, I will discuss some of the key differences between commercial and residential evictions. These differences are important for both tenants and landlords to consider prior to entering into a commercial tenancy.
Commercial tenants have no implied warranty of habitability. As discussed in our landlord basics webinar and the landmark case, Green v. Superior Court , a residential landlord is required to maintain the rental unit in a habitable condition. This requires them to make repairs to defective conditions that make the unit “uninhabitable”. Moreover, residential tenants have alternative remedies, including the Repair and Deduct remedy, should the landlord fail to make those repairs. Those same rules do not apply to commercial tenants. Commercial tenants may be forced to resolve any issues with water, heat, and the similar elements on their own (depending on the terms of their lease). This key difference is important to both landlords and tenants since this potentially eliminates the tenant’s ability to use habitability as a defense to an unlawful detainer action.
When residential landlords accept rent after the service of notice (3, 30, or 60 day), the acceptance of rent will be deemed as a waiver and the notice cured. The landlord is then unable to move for an eviction since they did not comply with the notice requirements. Alternatively, in commercial leases, acceptance of rent does not always constitute a waiver. Many commercial leases in California contain clauses that affirmatively allow the landlord to accept rent without it operating as a waiver. In commercial leases, courts will likely uphold the lease, even when it is unreasonable. The court views the commercial lease pursuant to the rules of contract law, and those certain implied protections afforded to residential tenants simply are nonexistent in the commercial context. Be sure to review your lease to ascertain if there is any specific language on waivers concerning the acceptance of rent.
Residential landlords must meet a strict set of requirements when serving their tenant(s) with a 3-Day Notice to Pay Rent or Quit. See CCP §1161.2. Should the notice lack any of the required items, it is deemed fatal and the landlord must start the process over. The landlord must state the exact amount due, who payment shall be made to, and etc. In the commercial context, the landlord is only required to estimate and does not need to state the exact amount due. This is due to the fact that rent is often calculated based on a percentage of the tenant’s income each month. This number can fluctuate month-to-month, making it nearly impossible for a landlord to calculate.
Please be advised these are just a few of the differences that can arise during a commercial eviction. If you are considering entering into a commercial lease, or are already in one and need help with an eviction, we highly recommend you seek legal counsel to ensure you are prepared to proceed effectively.