Facts: A landlord notified a tenant of a change in the terms of their month-to-month rental agreement requiring the tenant to obtain personal property insurance. The notice of change of terms stated failure to comply constituted grounds for the tenant’s forfeiture of the unit. The tenant did not obtain personal property insurance.The landlord served the tenant a three-day notice to perform or quit. After expiration of the three-day period, the landlord filed an unlawful detainer (UD) action to evict the tenant.
Claim: The landlord sought to remove the tenant and take possession of the unit, claiming the tenant’s failure to comply with the new terms of the rental agreement allowed the landlord to terminate the agreement and revoke the tenant’s right of possession.
Counter claim: The tenant sought to maintain possession of the unit, claiming their failure to obtain personal property insurance was not a material breach warranting termination since personal property insurance is primarily a benefit of the tenant, not the landord.
Holding: The California Superior Court held the landlord cannot terminate the rental agreement and remove the tenant since the tenant’s breach of the requirement to obtain personal property insurance was not a material breach justifying termination of the contract as the requirement primarily benefited the tenant. [Nivo 1 LLC v. Antunez (2013) ___C4th___]
Also at issue in this case:
Do restrictions on changes of lease terms trump breach of contract?
Facts: A landlord of a unit subject to a local rent-control ordinance notified a tenant of changes to the terms of their month-to-month rental agreement, specifying failure to comply constituted grounds for the tenant’s forfeiture of the unit. The rent-control ordinance prohibited landlords from making unilateral changes to tenancy terms without the written consent of the tenant. The tenant did not agree to the change of terms in writing and did not comply with the new terms. The landlord served the tenant a three-day notice to perform or quit and filed an unlawful detainer (UD) action to evict the tenant after the three-day period.
Claim: The landlord sought to remove the tenant and take possession of the unit, claiming the tenant’s failure to comply with the new terms of the rental agreement allowed the landlord to terminate the agreement and revoke the tenant’s right of possession.
Counter claim: The tenant sought to maintain possession of the unit, claiming the changed provisions were unenforceable since the tenant did not agree to the change in agreement terms in writing.
Holding: The California Superior Court held the landlord cannot terminate the rental agreement and retake possession of the unit since the unit was subject to the local rent-control ordinance which prohibited landlords from making changes to rental or lease agreements without the tenant’s written consent, and the tenant did not agree to the changes in writing, rendering the changed provisions unenforceable. [Nivo 1 LLC v. Antunez (2013) ___C4th___]
Editor’s note –The critical question posed by this case is whether a tenant’s failure to obtain personal property (renter’s) insurance constitutes a material breach of a rental or lease agreement. In this case, the court found that renter’s insurance is primarily a benefit to the tenant, not the landlord, thereby making the tenant’s breach “trivial.”
We disagree on this point, as renter’s insurance protects a landlord from liability for losses of the tenant’s personal property. It further provides for the landlord’s reimbursement for damages the tenant causes to the property.
Related reading:
The Court elaborated that not every breach of a contract justifies termination of that contract. In this instance, other unspecified factual circumstances led the court to conclude the landlord enforced this provision selectively against this particular tenant, and no others, likely in an attempt to remove what the landlord perceived as a “problem tenant.”
See first tuesday’s Three-Day Notice to Perform or Quit. [first tuesday Form 576]
