California law affords numerous protections to residential tenants that it doesn’t afford to commercial tenants. This is rooted in a few assumptions that the law has made regarding commerical and residentail tenants. One assumption is that commerical tenants are likely more sophisticated than their residential counterparts and are thus better equipped to protect themselves against an unscrupulous landlord. This assumption is further given weight by the argument that commercial tenants, by definition, have business experience (they’re leasing commercial space after all) and therefore likely have access to attorneys, accountants, real estate brokers and so forth. Another assumption commerical tenants likely have more even bargaining power with their commercial landlords as opposed to residential tenants, who are simply looking for a place to live. Lastly, and perhaps most important, a residential tenant facing eviction will likely experience more stress when he or she is being asked to leave their home, while a commercial tenant, while facing certain stresses facing eviction for their business, does not have to fight the stressful, and all to “close to home” battle of keeping their home.
With these differences in mind, lets look at some of the differences between commercial and residential evictions.
1. Residential Notice Requirements are more stringent
The methods of serving a notice to surrender possession of a residential property are more stringent than commercial property. The statutory notice requirements are considered an absolute minimum, and cannot be waived and must be adhered to, even if the residential lease attempts to change them. In commercial contexts, the parties can and often do negotiate differences in the manner of notice of termination of the tenancy, and are free to do so without regard to statutory notice requirements.
2. Pay or Quit Notices
A “Pay or Quit” notice is a notice that demands payment the tenant to either ‘pay or leave.’ Residential Notices to Pay or Quit have strict technical requirements that must be met. Failure to meet these requirements can be fatal to a Landlord’s efforts to evict the tenant. A chief requirement is a notice to pay or quit in a residential eviction must state the exact amount due, where it can be sent, to whom it can be sent, at what times of the day that person will be available, and a way to contact them. The notice will be fatally defective if it does not state the exact amount of rent due, or if it attempts to seek a greater amount than the actual back rent due.
For commercial notices to “pay or quit,” an exact amount is not required. This is particularly useful in commercial contexts, where rent is often calculated based on a percentage of sales, receipts , or even crops grown on the commercial property. These amounts can, and often do fluctuate, depending upon the month. Thus, an exact dollar amount of back rent due if the commercial tenant became late in their rent would be difficult, if not impossible to calculate. The law simply imoses upon the commercial landlord a requirement that they give an ‘estimation’ of the back rent due.
3. Habitability Defense
The landmark case Green v. Superior Court has given landlords heartburn ever since it was decided in 1974. In a nutshell, Green imposed a new requirement on landlords: they must provide “habitable” accommodations to residential tenants. The Green decision made it the law in California, that a landlord is responsible for providing habitable living space to residential tenants, with running hot and cold water, heat, protection against the elements, and other requirements. A failure to provide habitable premises to rent is a defense to an Unlawful Detainer action, if the tenant can show they withheld rent to offset issues with habitability.
Commercial tenants have no warranty of habitability, and are forced to fend for themselves if the premesis leased to them has issues with the elements, water, heat and the like.
The above points are just a few differences between commercial and residential Unlawful Detainer cases. For attorneys representing landlords, care must be taken to ensure all of the statutory requirements are met in Unlawful Detainer actions. For attorneys representing tenants, careful attention to the details of the case can let them find flaws, possibly fatal in nature with the landlord’s case, ensuring their clients’ interests are protected to the fullest extent possible.
Jon Straub is an attorney from coastal orange county, knowledgable in Unlawful Detainer and Real Property Law. Jon’s website is www.LawyerInLa.net.
