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What Happened: Eighteen months after signing a five-year lease, a rug store went into liquidation, stopped paying rent, and abandoned the premises. The landlord then divided the space into two separate units, leasing one to another rug store and the other to a bath floor décor shop.
What Happened: A tenant leased property on a pair of shopping center outlots to operate restaurants. The ground lease required the tenant to pay a pro-rata share of the CAM costs the landlord incurred to keep the common areas in good repair. The landlord sold the property to a new owner who notified and demanded that the tenant pay outstanding balances due on both outlots or face eviction. The tenant didn’t pay, and the landlord evicted it.
What Happened: Early in the COVID-19 pandemic, Los Angeles County imposed a temporary moratorium on residential and commercial evictions. A commercial landlord that had leased property to an auto repair tenant that was no longer paying rent due to COVID sued the county, claiming that the moratorium impaired his lease in violation of the Contracts Clause of the U.S. Constitution, which bans states, counties, municipalities, and other local governments from passing laws that impair “the Obligation of Contracts.”
What Happened: A restaurant tenant sold its business to another operator and her brother, the Marcials, who signed a 10-year lease with the landlord to continue operating the restaurant and bar from its current location at the mall. Problems with the transaction arose, and the original tenant ended up suing the landlord and Marcials for damages. But to get the jury trial it wanted, the tenant had to contend with the following language contained in its original lease, which it had taken over from the previous tenant:
What Happened: A landlord bound by a no-compete clause with Verizon Wireless leased retail property to a vape shop for the “sole purpose of a vape, tobacco, clothing, computer repair” operation. The lease also required the tenant to refrain from competing with Verizon “or any other phone-related services.”
What Happened: In response to the COVID-19 pandemic, a landlord agreed to reduce a retail tenant’s rent from $7,147 to $3,500. Signed in November 2020, the agreement was retroactive to May 2020 to March 2021, at which time rent would revert back to the original amount. However, the tenant continued to pay the reduced rent from April 1, 2021, through March 1, 2022. The landlord sent the tenant a notice of default after each monthly $3,500 check received; and when the tenant stopped paying rent entirely, it sought eviction for nonpayment.
What Happened: A nonprofit ran a multi-day music festival on recreational space it leased from the city. Two attendees who purchased tickets to the event were denied entry because they were carrying guns in violation of music festival rules banning attendees from having weapons while inside the venue. After arguing briefly with police, they left the grounds.
What Happened: After signing a 10-year lease with a health clinic, a landlord put the property on the market for sale as “net lease investment,” meaning there was a tenant already in place. The tenant then defaulted just three years into the lease. Invoking the acceleration clause, the landlord sued for the seven years of rent remaining. The landlord then declined two below-asking price offers on the property. The tenant claimed that in rejecting the offers, the landlord failed to mitigate its damages.
What Happened: An indoor cannabis cultivator operated under an oral lease while negotiating the terms of a written agreement. But after two years of fruitless negotiations, the landlord decided enough was enough and served the tenant a 30-day notice to quit. When the tenant refused to leave, the landlord went to court, winning not only an eviction order but also $180,000 in holdover damages. The tenant appealed.
Ruling: The California appeals court upheld the lower court’s ruling.
What Happened: Operating a Bitcoin mining business requires unusually high amounts of electricity. Miffed at learning this lesson the hard way, an office building landlord threatened a Bitcoin tenant with eviction. When the electric company later shut down the tenant’s power after transferring its account to the landlord’s name, the tenants suspected foul play and sued the landlord for constructive eviction and a temporary restraining order (TRO) requiring it to restore the power.
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