The California Court of Appeal recently reviewed whether a landlord must strictly comply with provisions of a commercial lease that require service of a five-day notice to a tenant for non-payment of rent. The case, Culver Center Partners East # 1 v. Baja Fresh Westlake Village, also involved a determination of whether an improperly served five-day notice could be deemed served properly where the tenant knew about the notice.[1]
In 2001, Baja Fresh entered into a five year commercial lease (“Lease”) with Culver Center’s predecessor for a commercial space in Culver City, California. The Lease required notices to be in writing and required delivery to be: (a) deposited in the U.S. mail, certified or registered, postage prepaid; (b) transmitted by telegraphic or electronic means; or (c) delivered in person. The Lease also required that all notices be delivered to a particular postal address for Baja Fresh.
On January 9, 2009, Culver Center served Baja Fresh with a five-day notice to pay $14,186.77 in rent by transmitting the notice through: (1) certified mail to Baja Fresh’s leasing agent’s address; (2) fax transmission to the same address; and (3) an attachment to an e-mail to Baja Fresh’s leasing manager. Culver Center failed to mail or personally serve anyone at the address for Baja Fresh indicated on the Lease.
In response, Baja Fresh’s leasing agent indicated that the five-day notice had not been properly served but that she would let Baja Fresh know. After being notified, Baja Fresh paid the rent but inadvertently mailed the check to the wrong address. As a result, Culver Center indicated that Baja Fresh failed to pay the rent within the required five-day period and filed an unlawful detainer against Baja Fresh. The trial court found that Baja Fresh had not been properly served the five-day notice and awarded judgment in favor of Baja Fresh.
In general, a landlord must strictly comply with the requirements contained in Civil Procedure Code Sections 1161 and 1162, which address three-day written notices and require service to the tenant personally, the tenant’s residence, or the tenant’s usual place of business. However, parties to a commercial lease may lawfully agree to different notice provisions, and the lease provisions will control.
The court found that the Lease required written notice to be delivered to a particular address stated in the Lease. Culver Center indicated that it did not deliver the notice to that address; however, it did e-mail the five-day notice. The Lease did not indicate what e-mail address could be used for proper service and did not contemplate that service could occur only through electronic means.
Although Baja Fresh knew of the five-day notice, the court found that Culver Center still sent it to the improper address, so the five-day notice was invalid. Again, the court looked to the Lease and found that the Lease required all waivers of the terms in the Lease to be in writing. Here, because Culver Center did not properly follow the requirements for notice set forth in the Lease, Baja Fresh’s waiver of notice would have to have been in writing. Since it was not, the court found that Baja Fresh did not waive its right to receive notice in writing.
It is important to note that the tenant knew about the five-day notice but won at the trial court and on appeal because the Landlord had not properly served the tenant pursuant to the Lease. This case highlights the importance of negotiating the proper terms in a lease prior to entering into it. Terms should clearly state the obligations and rights of the parties. Further, this case also highlights the necessity of ensuring compliance with the provisions in a lease¾whether as a landlord or tenant.
Therefore, it is important when handling commercial leases to properly contract for all issues that may later arise during or after the tenancy. It is also important, whether you are the tenant or landlord, to know the terms in your lease agreement and to know your rights and responsibilities. Please contact Anthony Marinaccio at (562) 699-5500 or amarinaccio@agclawfirm.com for more information.
[1] Culver Center Partners East # 1 v. Baja Fresh Westlake Village (No. B217037) Cal. Ct. of Appeal, 2d Dist., Div. 7, June 14, 2010.
