What can landlords do to enforce their rights to terminate a tenant's occupancy If a lease expires while the governor's order against evictions is in place?

I had the pleasure of hosting a video conference meeting with commercial real estate attorney Steve Blake from the Blake Law Group, to discuss some key issues that landlords of commercial real estate are facing in today’s market. In part one we tackle the question:

What can landlords do to enforce their rights to terminate a tenant’s occupancy, if a lease that expires while the governor's order against evictions is in place?

Yeah, this is a tricky question, because the rules right now are so messed up with evictions, but the courts are closed and in San Diego, they're closed until May 26. At this point, they're scheduled to open back then it'll be a phased reopening. They’re trying to bolster up the eviction department so that they can handle more of these types of cases. But if you have a tenant that's in default, right now and it looks like they're ignoring your efforts to get them to pay. Depending on the circumstances and the city or county that the property is in and you can, in some instances still serve them with a notice like a 30 day notice to vacate or a three day notice to pay or quit. It really depends on the circumstances. For example, I was handling one in Encinitas on a commercial property and in Encinitas, if the tenant has contacted the landlord before April 7, and informed them that they were not going to be able to pay April rent, then it prohibits the landlord's ability to serve a notice on them. But if they haven't done that, then arguably, you can still serve them with the notice. And in that notice, you want to make sure that it's proper, that's a valid notice. It has all the requirements in it, include an election of forfeiture of the lease, if it's still in effect, if it's a fixed term lease and it's already expired and they're still there, then you can serve them with the notice, again depending on the jurisdiction and the city.

But you're going to have to wait to evict them until the court starts handling those again, which could be a while. The other option too, that people don't always think about. But when you think about an eviction, that's a specific court procedure that's focused on getting possession of the property back to the landlord. So it's what's called a summary proceeding, it moves very quickly, once you file it, you can usually finish it within 30 to 45 days, and you're done. And that's an unlawful detainer eviction case. And in that case, you're only allowed to ask for possession and for money owed for past due rent. So those are special little cases. And there's only a couple departments in San Diego that handle them, which is why it's such a mess and it's taking so long but a landlord or owner has another option against the default intent, and that is to file a regular lawsuit, not an eviction case, but just a regular lawsuit for breach of lease, because there's a written document contract with that tenant, they've stopped paying rent, they breached it. So now they're in breach of the lease. And there's no moratorium on breach of lease cases. It's only on eviction cases, starting at the end of May, if you've got a tenant in default, you could sue them for breach of lease. And there's once you file that case, there's a bunch of things you can do in that court case to put pressure on a tenant because it opens up everything that's allowed in a regular civil lawsuit. So you can apply right away to the court for a lien against any of the tenants assets, because it's based on a contract claim with for a fixed amount of money that's owed.

Let's say the tenant stops paying rent today, and they've got two years left on their lease, and you serve them with a notice, they don't pay, rather than evicting them, you could sue them and you'd accelerate all the rent that's owed for the next two years, you file that lawsuit against them, and it would be seeking a large amount of money, let's assume their rents $10,000 a month, you've just sued them for, $240,000. And if you go into court right away and try to get a lien against the tenant’s assets, now you've got a lien for  $240,000 against them while your case is still pending. And a lot of times, that changes the tenant’s attitude, and it also may help the owner later if that tenant files for bankruptcy or something like that, because now you have a court ordered lien against that property, or the assets of the tenant. So, when I've been talking to clients, you could do the eviction, but it's going to take a while. You can also sue them for breach of lease, you can do both or you could, do neither. Without the courts being open, the rule in California is an owner of property can't resort to self-help, they call it which just means you can't just go over to the property, throw out the tenant’s stuff on the sidewalk and change the locks. That's called self-help. It's not allowed in California. So, there's not a lot that landlords can do outside of court, other than to just negotiate a resolution of the tenant. And if you're able to do that, you could give them two months free rent, if they agree to leave by a certain date, or you could pay them cash to leave. I've seen that happen.

So, there's a lot of different options, but I like the breach of lease case option because it forces the tenant to have to do something. Whereas the eviction right now, it doesn't force them to do anything. It's so up in the air and we don't know when it's going to re-open. 

As always, anything described above is not legal advice. This information is from a lawyer's perspective and every situation is different, it's case by case and you have to review the agreements that pertain to whatever tenant you're dealing with.

Watch full video conference meeting between myself and Steven Blake below.