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Reynolds v. Lau

Facts: A landlord purchases a multi-unit property subject to a local rent control ordinance under which a landlord may evict a tenant when the landlord is to occupy the vacated unit and no other comparable vacant unit exists on the property. The landlord serves a tenant with an eviction notice so the landlord may occupy the unit as a residence. A second tenant renting a separate unit in the property exclusively sublets their unit, as permitted by their lease. The first tenant argues that since the second tenant’s unit is functionally vacant, the landlord needs to occupy  the second tenant’s unit instead. The landlord refuses and evicts the tenant.

Claim: The first tenant seeks money losses as a result of their eviction, claiming the landlord violated the rent ordinance by evicting them in bad faith since the ordinance states a landlord may only evict a tenant to occupy the unit when no other comparable unit is available, and the second tenant’s unit was essentially vacant as a result of their subletting activities.

Counterclaim: The landlord claims the eviction was not made in bad faith since the second tenant’s subletting activities did not render the unit vacant and the landlord had a clear intent to occupy the first tenant’s unit as a residence.

Holding: A California appeals court holds the landlord’s eviction of the tenant was made in good faith since the second tenant’s subletting activities did not render the unit vacant and the landlord had a clear intent to occupy the first tenant’s unit as a residence. [Reynolds v. Lau (August 7, 2019)­_CA6th_]

Read the case text.

Editor’s note — first tuesday recently reported on a separate case that hinged on the “good faith” provision of this rent control ordinance. In DeLisi v. Lam, the court ruled in favor of the tenant, as the landlord’s sibling’s intention to occupy the property for the required length of time was not clear. Here, since the landlord clearly intended to occupy the unit as a residence, the court concluded the eviction was made in good faith.