Geraghty v. Shalizi

Facts: A landlord of a rent-controlled property intends to move into a currently occupied unit. The landlord and the tenant enter into a buyout agreement in which the tenant agrees to vacate in exchange for an agreed-upon sum of money to avoid an owner move-in eviction under the rent control ordinance. The tenant vacates and the landlord moves in. A year after taking occupancy, the landlord vacates, then rents the unit to a new tenant at a higher price.

Claim: The former tenant seeks to rescind the buyout agreement, claiming the landlord misrepresented their intention to occupy the unit in accordance with the rent control ordinance since the landlord later rented the unit to a new tenant at a higher price in violation of the ordinance.

Counter claim: The landlord claims they did not misrepresent their intent to occupy and the buyout cannot be rescinded since the landlord occupied the unit, and the ordinance only applies in the event of an owner move-in eviction.

Holding: A California court of appeals holds the buyout agreement cannot be rescinded since the landlord did not mislead the tenant about their intent to occupy the unit, and the rent ordinance does not apply as the buyout agreement avoided the move-in eviction procedures under the ordinance. [Geraghty v. Shalizi (January 24, 2017) _CA4th_]

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