Sooner or later, every landlord has to deal with tenants who don't pay their rent but won't move out. This will overview the procedures available to recover possession of the premises so that they can be put to better use and, hopefully, to recover the money.
California law prohibits self-help by landlords against tenants who don't pay their rent. The landlord cannot turn off the utilities or change the locks. The principal means to evict a non-paying tenant still in possession is an unlawful detainer lawsuit.
A. The Unlawful Detainer Lawsuit.
The UD lawsuit is a summary proceeding designed to quickly return possession of the premises to the landlord and to give the landlord a judgment for rent due through the date of eviction. UD lawsuits are entitled to the highest priority in the court system, meaning that they will get to trial quicker than any other lawsuit. Though the likely time varies by county, currently judgment is usually entered in 45-90 days.
This is an area with a lot of unique rules which must be specifically followed. Failing to satisfy some of these rules can result in delay, or even the need to start over.
Legally, there are two components to this process. First, the landlord must regain the legal right to possession of the premises. Second, once this has been accomplished, the landlord can regain actual possession.
1. Regaining Legal Possession.
Legal possession is regained through serving the tenant with a three-day notice to pay rent or quit. By statute, this document must contain certain items, including the name of the tenant, the address of the premises, the amount due, the address where payment can be made, the hours payment can be made, and, if desired, a statement that the landlord has declared a forfeiture of the lease. (The lease may require notice of more than three days.)
Landlords often ask what can be included in the Three-Day Notice. The answer is "rent." What is "rent" is determined by the lease. Most leases today include a provision stating that all amounts due under the lease are "rent." Depending on the lease, this means that the Three-Day Notice (or Notices) can include base rent, common area operating expenses, utility bills, insurance premiums, and late charges.
The Three-Day Notice should include all unpaid "rent" through the date of the Three-Day Notice, going back no more than one year.
The Three-Day Notice must be served by using one of the methods specified by statute, which are different from the methods allowed for service of a summons and complaint, or by any special method stated in the lease.
Once served, the tenant must pay the amount stated in the Three-Day Notice within three days, or the tenant loses its legal right to possession. If the tenant pays the full amount, then it can stay in the premises.
In counting the three-day period, weekends and holidays are included, though the final day must be a business day. For example, if the Three-Day Notice is served on Friday before a weekend followed by a Monday holiday, the tenant has until the close of business on Tuesday to pay the rent.
The language of most leases allows the landlord to accept partial payments, even within the three-day period, and still proceed with the lawsuit. This is also true of payments made after the three-day period has expired.
2. Regaining Actual Possession.
If the tenant fails to pay the full amount stated in the Three-Day Notice within the required time, the next step is to regain actual possession of the premises. This is done through an unlawful detainer ("UD") lawsuit.
The UD complaint must be verified under penalty of perjury by a representative of the landlord.
The UD complaint may be served using one of the statutory procedures. The tenant then has only five days, instead of the usual 30 days, to file and serve its response.
If the tenant does not respond, then default can be entered. The court will then issue a writ of possession, and the sheriff will evict the tenant.
Eviction is a powerful tool. After the time specified in a notice to vacate has expired, the actual eviction occurs on a date and time unknown to the tenant. Eviction is performed by a uniformed police officer who requires the tenant to leave immediately. The landlord's locksmith can immediately rekey the premises.
C. Obtaining a Judgment for Unpaid Rent.
Whether to obtain a money judgment depends on the landlord's business purpose. If there is a qualified new tenant who wants the premises and/or the old tenant will never be able to satisfy a money judgment, then regaining possession may be enough.
In the UD lawsuit, a money judgment through the date of eviction can be entered. If the landlord wants to pursue the unpaid rent through the end of the lease term, then it can do so through a lawsuit for breach of lease. This is either a separate lawsuit, or the UD lawsuit can be converted into a lawsuit for breach of lease.
One important question is whether the new tenant is likely to pay higher rent than the former tenant. The former tenant is entitled to credit for any rent paid by the new tenant so, in a rising market, any recovery could be significantly reduced or even fully eliminated.
This is a quick overview of this very technical area. There are procedures specified for other situations that may arise, such as handling personal property left behind at the premises, and there is an alternate procedure if the tenant has truly abandoned the premises. Many landlords prepare and serve their own Three-Day Notices, but most landlords use experienced landlord-tenant counsel to prosecute the UD lawsuit.
Kenneth L. Perkins, Jr. specializes in business litigation and counselling. Mr. Perkins has litigated cases in both state and federal courts at the trial court and appellate levels, as well as before related government agencies. Mr. Perkins has used various methods of alternative dispute resolution to his clients’ advantage, including arbitration, mediation and private judges.
Mr. Perkins' experience encompasses a wide range of business disputes. He has handled both simple and complex business disputes, including matters involving breach of contract, business torts, fraud, non-competition agreements, trade secrets, employee theft, collections, alter ego claims, partnership disputes (general and limited), products liability (design and manufacture), and intellectual property disputes (trademark, trade dress and copyright).
Mr. Perkins also represents commercial landlords in landlord-tenant cases, including unlawful detainer and breach of lease cases. He has litigated and advised clients on matters involving tenant improvements, fixtures, assignment/subletting, tenant bankruptcies, mechanic’s liens arising from tenant or contractor insolvency/ bankruptcy, environmental issues, and abandoned property. These cases principally involve office buildings, industrial buildings, and commercial centers. His clients have included owners, property managers, and, on occasion, commercial tenants.
Mr. Perkins also counsels and defends employers in employment disputes. This includes defense of claims for wrongful termination, constructive termination, discrimination (race, age, sex, religion, sexual orientation, disability), harassment, and wage and hour matters, including claims for unpaid overtime and missed meal breaks and rest periods. This includes defense of claims in the courts and before the Labor Commission, the Equal Employment Opportunity Commission, the Unemployment Insurance Appeals Board, and the Workers’ Compensation Appeals Board (claims under Labor Code section 132a).
Mr. Perkins has substantial experience in matters involving the printing and graphics arts industries. In addition to the issues common to any business (e.g., personnel issues, trade contracts), these matters have involved issues specific to the printing industry, such as defective printing/cutting/gluing, defective equipment (e.g., poor registration, ghosting), and equipment finance agreements. His clients have included companies involved in printing, lithography, binding, coating, direct mail, fulfillment, large format, newspapers/periodicals/magazines, gluing, photocopying, graphic design, business forms, labels, and packaging.
Mr. Perkins also serves as outside corporate counsel to not-for-profit trade associations and related entities (e.g., insurance agency, long-term disability plan, MEWA/ERISA plans). In addition to typical operations issues (e.g., personnel issues, landlord-tenant issues), this includes advising boards and committees, preparation and revision of bylaws and other documents (e.g., resolutions, committee charters, and policies concerning document retention and "whistleblowers"), and advising on member discipline, board structure and other governance issues.
Mr. Perkins received his B.A. from University of California, Irvine and his law degree from the University of Southern California School of Law.
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