Leases on real property are some of the most commonly generated contracts in the United States. Many businesses lease office and retail space and sign commercial leases as tenants. Many individuals, especially within the younger demographic that struggle to secure credit due to student loan debt, will opt to rent a home rather than buy one. Law on landlord-tenant relationships is complicated and relies on centuries-old precedent, so you would be reasonable to have some questions.
Most leases are form contracts presented by large commercial broker/agents, but the terms are usually negotiable. Triple-net leases are common, and personal guarantees for individual business owners are the rule rather than the exception. Other common issues this area include common area maintenance (CAM) costs, fixtures, taxes, and tenant improvements. Respective rights of landlords and tenants both residential and commercial often vary depending on the jurisdiction in which the lease resides.
A qualified California landlord-tenant attorney can help with lease issues in a number of ways. Our attorneys can explain the advantages and disadvantages of a long-term lease to small business tenants and put them in a position to negotiate both appropriate duration and options to renew. We can also assist property owners through the often arduous process of unlawful detainer and secure evictions or compulsory judgements where necessary. Find out what NewPoint Law Group can do for your today. Call our offices at 1-800-358-0305 to schedule a free consultation today.
Residential Landlord-Tenant Law in California
Residential tenant evictions require strict compliance with various rules and procedures, and landlord errors may require the landlord to “start over.” Further, state funding of the court system in California has been reduced in recent years, meaning that substantial delays in the process have been experienced.
In most instances, the key to success for landlords in residential disputes is to gain possession of the premises as soon as possible and, if the tenant is not judgment-proof, to pursue damages in a later action. If issues of possession are involved, the landlord must follow certain statutorily prescribed procedures to gain possession. These procedures are not the same as the procedures for residential evictions and are often more landlord-friendly vis-à-vis residential evictions.
It is important to always have a written lease with terms most favorable to the drafting party (typically the landlord). While some tenants have learned to use and abuse the system to stretch out their free ride, the landlord can mitigate the loss by having a knowledgeable attorney, and gain possession sooner than what might otherwise be realized.
Commercial Landlord-Tenant Law in California
California law differs on rights of tenants and landlords depending on whether the lease is residential or commercial in nature. As such, the most common issues that commercial landlords and tenants may encounter differ from those in residential leases.
Common issues in commercial lease agreements tend to center on the following areas:
- Operating expenses
- Maintenance responsibilities and fees
- Improvement responsibilities and fees
- Provisions on calculated rent based on sales or revenue percentages
- Operating expenses
The complexity of these issues reflects the level of complexity of commercial lease agreements, which can contain hundreds of vague or complex provisions that are designed to cause uncertainty where one party may potentially be in breach. If you are ever unsure on what your lease permits, you should obtain legal counsel prior to acting in a way that may hurt your position or violate the terms of the lease.
Our diligent landlord-tenant attorneys are well-equipped to sift through the fine print in a commercial lease agreement. However, we always prefer to draft the language ourselves, a service we offer to all of our clients. That way, you can be sure that you are avoiding any tricks or deception through contractual language that others might insist is “boiler-plate.”
Lease Assignments vs. Subletting in California
The vast majority of disputes in California between residential landlords and tenants arises over the issue of transferring the lease to another tenant. Transfers happen in one of two ways: assignment or sublet.
The key difference between assignments and sublets is the portion of the lease rights that are transferred. When a tenant signs a lease with a landlord, they obtain certain privileges and rights of control of the property. Transfer actions such as assignments and sublets attempt to give some of those rights to a person or entity who was not involved in the original leasing agreement.
An assignment is a transfer of the entire leasehold, whereas a sublet separates the leasehold in some metric (e.g. time or square footage). As an example, if Jack is a tenant at 123 Main Street for a term of six months, his leasehold is on that specific property for that specific length of time. If Jack transfers all use of his property to Jill for the remaining six months of his lease in exchange for Jill paying Jack the remaining balance of the lease agreement, he has assigned the lease. Conversely, if Jack agrees to let Jill live in the guest bedroom of 123 Main Street for 3 months in exchange for a portion of the rent, Jack has engaged in a sublet.
Whether assignments or sublets are allowed depends on the relevant laws of the jurisdiction. Lease agreements may contain provisions that prohibit either or both forms of leasehold transfer. In California, for instance, the tenant typically must obtain written consent from the landlord prior to a transfer of their leasehold interest. A tenant’s failure to do this would entitle a landlord to terminate the tenancy with three days prior written notice under California law.
Rental Application and Tenant Screening in California
Pre-screening tenants is the most effective means by which landlords can avoid problems down the road. However, the screening process comes with restrictions that vary depending on the jurisdiction that you are in. Laws may differ between states or even individual counties or municipalities.
Even where there are less restrictions on a landlord’s ability to perform pre-screening, landlords must make decisions on applications without being discriminatory. Making a determination upon consideration of a tenant’s criminal history, for example, may provoke questions about a landlord’s conformity with both state and federal fair housing practice laws.
Whether you are a landlord or a tenant, one of our experienced landlord-tenant lease attorneys can answer any questions you may have about federal anti-discrimination regulations affecting landlord-tenant relationships.
Required Landlord Disclosures in California
Landlords often face requirements for disclosure of certain information which my concern health or security concerns to potential tenants. Information that is typically required by statute includes gas and electricity measurements, any history of treatment of conditions such as toxic mold or termite infestation, or any removal procedures of dangerous elements such as asbestos or lead paint.
Failure to disclose such information to prospective tenants where required by law could invalidate the entire lease and potentially subject the landlord to severe penalties.
Unlawful Detainer in California
Landlords looking to reclaim their rental units from tenants who are unable or refuse to pay must follow the steps of an “unlawful detainer,” a court proceeding which gives a landlord the right to evict a tenant. Those who try to evict without using this proceeding will not receive legal authorization. Whether it is a matter of not receiving rent or other less common reasons, the landlord must follow a series of steps before eviction can occur. The only way to legally evict a tenant is if the landlord wins the unlawful detainer suit. Even after winning the suit, a landlord cannot have any hand in the removal of a tenant and must leave all other interactions to the sheriff.
Legal Costs in Landlord-Tenant Disputes in California
Our firm represents both landlords and tenants in commercial and retail lease negotiations and conflict resolution. If matters result in litigation, the parties are best served in having an experienced attorney to navigate the complexities of gaining possession and recovering contractual damages. Usually, attorney’s fees clauses will be included in the lease agreement. The stakes are that much higher when the losing party is also required to pay the prevailing party’s reasonable attorney’s fees. Therefore, it is important that you secure the very best representation available.
We Can Help You with Your California Landlord-Tenant Law Questions
Our experienced California landlord-tenant attorneys have represented real estate investors, large landlord businesses such as apartment complexes, and property management companies. Please contact NewPoint Law Group at 1-800-358-0305 to schedule a free consultation today.