In Olivares v. Pineda, attorneys for a landlord appealed from the denial of their anti-SLAPP motion. The attorneys moved to strike a tenant’s lawsuit for wrongful eviction and misuse of a security deposit, directed at a failed first eviction lawsuit followed by a corrected three-day notice that never resulted in a second.
Continue reading Olivares v. Pineda – Litigation Privilege Only Counts If Your Math Checks Out, and Rent Demand Without Eviction May Be Actionable
Two recent opinions on owner and relative move-in evictions analyze the murky area of “good faith”.
Continue reading What’s a “Good Faith” Owner or Relative Move-In Eviction? Recent Court Rulings Explore OMI/RMI’s, But Following The Letter Of The Law Might Not Be Enough To Avoid A Lawsuit
The City was not required to prepare an EIR to address the Project’s alleged impact on the loss of rent-stabilized housing units or the displacement of tenants because the property previously had been withdrawn from the rental market pursuant to the Ellis Act; under CEQA the assessment of impacts of a proposed project ordinarily is based on conditions as they exist at the time the environmental analysis is commenced.
Hollywoodians Encouraging Rental Opportunities v. City of Los Angeles affirmed a trial court’s determination that an EIR was not required under CEQA to evaluate impacts of tenant displacement for a property withdrawn from the rental market under the Ellis Act.
When a developer sought to convert an 18 unit apartment building into a 24 guestroom boutique hotel, a neighborhood association (Hollywoodians Encouraging Rental Opportunities (“HERO”)) appealed approval of the permit. The City Council denied the appeal, so the association petitioned the superior court for writ of mandate to reverse the City Council’s decision.
Continue reading HERO v. City of Los Angeles (2019): Relevant Baseline for CEQA Analysis Properly Evaluated a Property Already Withdrawn under the Ellis Act and Therefore Properly Excluded Evidence of Impact on Housing and Population
“Allen had no contractual duty to complete the questionnaire. The parties indicated no shared understanding, discussions or advisement of the questionnaire’s binding nature. The questionnaire contained no express statement that the tenant would be bound by the assertions made in the questionnaire. The questionnaire was ambiguous on relevant terms, indicating that it was not the sort of communication that would lead to binding statements regarding terms and conditions of tenancy. And the record contains no indication that all parties were highly sophisticated or enjoyed similar bargaining power.”
Naseem and Naser Hilaly were residential landlords of a multiunit property in San Francisco. They purchased the building along with their son and his wife, who wanted to live together with each of their parents in the same property. Betty Allen was a long-term tenant who, prior to the sale of the building to the Hilalys, executed an estoppel statement describing that she did not have parking.
After failing to negotiate a buyout agreement, the Hilalys proceeded to withdraw the property pursuant to the Ellis Act. Allen’s mother lived with her during this period, and a visiting nurse parked in the curb cut of the street, blocking the garage that the Hilalys were parking in. The Hilalys left a note that said, “I’ve told you not to park here again”.
Continue reading Hilaly v. Allen: Tenant Successfully Defends Ellis Act Eviction with “Change to Terms of Tenancy” Defense, Following Landlord’s Reliance on Estoppel Statement
In Veiseh v. Stapp, the Fifth District addressed a novel turn on an old rule – that the plaintiff in an action for trespass need not establish title, but is merely required to establish actual possession.
The plaintiff owned farmland, and though he used it for his own purposes, he attempted to transfer it to his ex-wife, for the benefit of their daughter, for estate planning purposes. However, the form of transfer implicated the Uniform Transfer to Minors Act, which required such assets to be held for the benefit of the transferee minor. Plaintiff’s transfer was defective, because he continued to use the property himself. The owner of the adjacent parcel leased to a cattle rancher, whose cattle grazed on plaintiff’s land, damaging it. Plaintiff sued for trespass.
The defendants moved for a bifurcated trial to first litigate the issue of standing. They argued that a trespass plaintiff was required to establish that he was in “lawful possession” of the trespassed land. Because the transfer violated the Uniform Transfer to Minors Act, the plaintiff was not the right plaintiff. The trial court agreed.
The Court of Appeals, however, noted the “well-settled proposition that the proper party plaintiff in an action for trespass to real property is the person in actual possession”. “The proper person to bring an action for trespass to real property is the person in actual possession. In the context of a trespass action, ‘possession’ is synonymous with ‘occupation’ and connotes a subjection of property to one’s will and control. We adopt this definition.”
While the term “lawful possession” is sometimes used to describe the trespass plaintiff’s status, the term “lawful” in this context merely means “not tortious”. The father’s occupation and possession was sufficient to maintain the action, and the Court of Appeal reversed with directions to litigate the second phase of the trial.
In Chun v. Del Cid, a landlord of a single family home in Los Angeles served 60-day termination notices on multiple tenants who were leasing individual bedrooms in a single family home. The Los Angeles Rent Stabilization Ordinance generally exempts single family homes from eviction protections, and without LARSO eviction protections, a 60-day notice under state law can often be served at any time, for (almost) any reason.
The tenants defended an unlawful detainer lawsuit on the basis that their use of the property as a “rooming house” took the single family home out of the exemption. The trial court and appellate division disagreed, finding that the property was designed as a single family home: that is, a detached dwelling containing only one dwelling unit – a group of two or more rooms, one of which is a kitchen. The Court of Appeal granted review, evaluating several interlocking definitions under the LA municipal code to reach a different conclusion.
Continue reading Chun v. Del Cid (2019) – Second District Court of Appeal Interprets LA Municipal Code To Find “Rooming House” No Longer Exempt as “Single Family Home” from Eviction Protections
“Does a right of first refusal contained in a written lease expire when that leasehold ends and the tenant becomes a ‘holdover’ tenant, and when the lease specifies ‘the continuing [holdover] tenancy will be from month to month’? We conclude that a right of first refusal is not an essential term that carries forward into a holdover tenancy unless the parties so indicate.”
In Smyth v. Berman, the Second District Court of Appeal held that, when a commercial tenant has a “right of first refusal” to purchase the property, included in a term lease agreement, that right is not among the “essential terms” of the lease. Because it is not essential, it is not included among the terms and conditions of the periodic tenancy created by the tenant’s holdover and the landlord’s acceptance of rent.
“When a lease expires but the tenant remains in possession, the ‘relationship’ of the landlord and tenant ‘changes’. The ‘lessor-lessee relationship’ based on ‘privity of contract’ ends, and a new ‘landlord’-‘tenant’ relationship based on ‘privity of estate’ springs into being by the operation of law. (Civ. Code §1945.) This new ‘hold-over’ tenancy is presumed to continue under the same terms contained in the now-expired lease except as those terms may have been modified by the landlord and tenant. (Civ. Code, § 1945) This case tees up the question: If the expired lease contained a right of first refusal, is that right one of the ‘terms’ that presumptively carries forward into the holdover tenancy? We conclude that the answer is ‘no’.”
The court added that this is merely a presumption, and the parties could contract for this term to renew. But absent such intention, this presumption added to the stability of commercial tenancies, by allowing the holdover tenant to remain on a month-to-month basis, under terms and conditions that didn’t give the landlord an incentive to nullify the right of first refusal by evicting their tenant.
In Dr. Leevil, LLC v. Westlake Health Care Ctr., a property owner leased its property to a skilled nursing facility and later obtained a secured loan. It defaulted. Dr. Leevil, LLC purchased the defaulted loan and initiated a nonjudicial foreclosure sale, ultimately buying the property at the trustee’s sale. Dr. Leevil, LLC served a three day notice to quit the next day, but did not record title for five more days.
Serving the notice before becoming “record owner” seems counterintuitive. However the nonjudicial foreclosure statutes arguably condoned the practice. Cal. Civ. Code § 2924h(c) states, “the trustee’s sale shall be deemed final upon the acceptance of the last and highest bid, and shall be deemed perfected as of 8 a.m. on the actual date of sale if the trustee’s deed is recorded within 15 calendar days after the sale, or the next business day following the 15th day if the county recorder in which the property is located is closed on the 15th day.”
The unlawful detainer statutes refer to the nonjudicial foreclosure statutes, in setting forth cases of post-foreclosure evictions. Applicable here, “a person who holds over and continues in possession of . . . real property after a three-day written notice to quit the property has been served . . . may be removed therefrom . . . Where the property has been sold in accordance with Section 2924 of the Civil Code, under a power of sale contained in a deed of trust executed by such person, or a person under whom such person claims, and the title under the sale has been duly perfected.” Cal. Code Civ. Proc., §1161a(b)(3).
In other words, Dr. Leevil, LLC believed it could serve the notice to quit first, because it was already the owner, and title could be (and ultimately was) retroactively perfected as of the actual purchase date. The Court of Appeal adopted this interpretation.
Continue reading Dr. Leevil, LLC v. Westlake Health Care Ctr. (2018): Title Must Be “Duly Perfected” Before Service of Unlawful Detainer Three-Day Notice, Despite Retroactive Perfection of Title Under Nonjudicial Foreclosure Statutes
In DLI Properties, LLC v. Hill, the Appellate Division of the Superior Court of Los Angeles parsed a state statute requiring certain notifications by new landlords to their tenants, affirming an unlawful detainer judgment for the landlord.
DLI Properties, LLC acquired a property in foreclosure that was tenant occupied. Generally, foreclosing on an earlier interest (like a deed of trust) will eliminate interests that are later in time (like a lease). But California has specific statutory protections for tenants facing foreclosures. California also requires successor owners to notify existing tenants of information how they can pay rent and how they may serve notices relating to the tenancy and civil process. These requirements (found in Civil Code §1961, et seq.) are somewhat self-policing for successor owners, who cannot serve a rent demand notice to initiate an unlawful detainer, based on rent owed during any period of non-compliance.
DLI Properties, LLC purchased the subject property in foreclosure. It hired Strategic Property Management, Inc. to manage the property, and Strategic entered into a new lease agreement with the tenant (Hill) on the date of sale. Hill had become delinquent in the payment of rent, and DLI served a three-day notice to pay rent or quit, and then filed an unlawful detainer action. Before the jury returned a verdict in favor of DLI (finding that it complied with the unlawful detainer procedures and that Hill was not entitled to offsets for habitability issues), Hill moved for nonsuit, then directed verdict, then JNOV on a single issue: failure to comply with Section 1962, et seq.
Section 1962(c) provides: “The information required by this section shall be kept current and this section shall extend to and be enforceable against any successor owner or manager, who shall comply with this section within 15 days of succeeding the previous owner or manager. A successor owner or manager shall not serve a notice pursuant to paragraph (2) of Section 1161 of the Code of Civil Procedure or otherwise evict a tenant for nonpayment of rent that accrued during the period of noncompliance by a successor owner or manager with this subdivision. Nothing in this subdivision shall relieve the tenant of any liability for unpaid rent.”
The Appellate Division upheld the trial court ruling, noting the distinction between “owners” and “successor owners” under the statute. The California Legislature was understandably concerned about the treatment of existing tenants who do not necessarily know who succeeds to their lease contracts following foreclosure. (In fact, this concern guided the California Supreme Court’s recent analysis of post-foreclosure eviction notices in Dr. Leevil, LLC v. Westlake Health Care Center.)
While DLI purchased at foreclosure, its property manager executed a new lease, and this rendered them “owner” under the statute: “This disparate treatment of owner and successor owner/manager for the same dereliction of their statutory duty indicates the prohibition is meant to specifically target successor owners and their managers to address a danger posed by the change in ownership. There is a greater likelihood a tenant would not be aware of relevant information concerning a successor owner/manager rather than an owner with which he enters into a lease agreement. Therefore, the prohibition against evictions encourages and incentivizes a successor owner/manager to disclose such information.”
Ultimately, where the owner (via its property manager) entered a new lease with an existing tenant, it created a direct relationship with the tenant, which did not resemble any of the Legislature’s concerns in enacting the statute.
“The litigation privilege is ‘not without limit’, as the Action Apartment court took pains to point out. (Action Apartment, supra, 41 Cal.4th at p. 1242.) Because recognition of the privilege here would neuter section 1942.5 by removing eviction from the statutory remedy of retaliatory eviction, we view the clash between section 47, subdivision (b), on the one hand, and section 1942.5, subdivisions (d) and (h), on the other, as irreconcilable. To be consistent with the high court’s guidance that we give section 1942.5 a liberal construction designed to achieve the legislative purpose, we conclude that the litigation privilege must yield to it.”
In Winslett v. 1811 27th Avenue, LLC (2018), a former tenant filed a complaint against a landlord for retaliation and retaliatory eviction, under Section 1942.5 of the Civil Code, as well as violations of Oakland’s just cause for eviction ordinance. The trial court granted the landlord’s anti-SLAPP motion to strike. The tenant appealed the trial court’s ruling that the litigation privilege barred the retaliation claims and that her claims under the eviction control ordinance were based on protected activity under the anti-SLAPP statute. The Court of Appeal agreed and reversed.
