Facts: A landlord files an action to evict a tenant for a violation of the lease. During the first three months of the pending eviction action, the tenant timely pays rent by direct deposit to the landlord’s bank account per the lease terms, which the landlord neither returns nor rejects. The tenant then advances the next three months’ rent which the landlord, considering the lease terminated and the rent no longer due, rejects and returns to the tenant. The eviction action is dismissed and the lease is reinstated. The landlord does not provide notice or demand repayment of the three months’ rent previously returned, and serves the tenant with a three-day notice to pay rent or quit. The tenant pays the back rent on the fourth day after service of the notice, which the landlord also rejects.
Claim: The landlord seeks an unlawful detainer (UD) action and payment of money losses and fees claiming the tenant is in default since the lease was reinstated with the dismissal of the eviction action and the tenant did not timely pay the back rent under the three-day notice to pay rent or quit.
Counterclaim: The tenant seeks to invalidate the three-day notice to pay rent or quit and the landlord’s UD action claiming when the lease was reinstated, the three months’ rent was not in default but merely due since the tenant was not notified of the reinstatement of the lease and the three months’ advance rent was timely paid even though the landlord returned it.
Holding: A California Court of Appeals holds that the three-day notice to pay or quit is void and the UD action thus invalid since the tenants had timely paid by direct deposit all rent due through the period covered by the three-day notice, and the returned rent was merely due — not in default — on the reinstatement of the lease. [Kruger v. Reyes (2014) ___CA3rd___]
