Terminating Commercial and Residential Tenancies After Automatic Renewal

May 30, 2019

 

The rule that a lease term continues month to month when it expires, and the tenant does not move out and continues paying rent, comes from a single statute: Civil Code Section 1945.

 

Although this statute applies to all properties, the rules diverge for when it comes to terminating an automatically renewed tenancy for residential and commercial properties. In situations where the procedure for terminating an automatically renewed tenancy is in doubt, landlords and their representatives should understand the appropriate requirements for terminating the tenancy at issue.

 

Civil Code § 1946 establishes the default rule for all tenancies, except those covered by Civil Code § 1946.1, so it has the broadest application. Under § 1946, the renewal period cannot exceed 30 days, no matter the length of the original lease term. This would mean that technically a lease renewed under § 1946 would be renewed for less than a month if the month had 31 days, although it is unlikely that that distinction would ever be meaningfully enforced. If the parties thereafter wish to terminate the periodic tenancy, then either party must give at least 30 days’ written notice, unless the original lease itself specified a shorter termination notice period. However, the notice period cannot be shortened to less than 7 days.

 

Civil Code § 1946.1 overrides and replaces the above rules for any property leased as a residential dwelling. Under § 1946.1, the renewal period can be for any length of time, and the landlord must give a written 60 day termination notice by default. The well-known exception to this rule is that a 30 day written notice is valid if the tenant has resided in the premises for less than a year. A lesser-known exception also allows a 30 day written termination notice if the property is a condominium or single family home that is being sold to a natural person who intends to live in the property for at least 1 year, and escrow for the sale will be established within 120 days, and the landlord had not given a similar notice ever before to that tenant.  Conversely, in any case a tenant is only obligated to give notice for a period equal to the renewal period, e.g., 1 month in advance for a month-to-month tenancy. CC § 1946.1 also makes clear that it is not intended to restrict cities and other public entities from regulating the form and process of residential evictions.

 

Under both laws, the landlord’s service of the notice of termination of tenancy must be by registered or certified mail, or by the standard method set forth in Code of Civil Procedure § 1161: personal service, substitute service with mail to the premises, or by posting and mail to the premises. These methods of service are mandatory and cannot be modified by contract between the parties. The only exception is for terminations pursuant to CC § 1946.1, which gives tenants the special option to terminate a non-residential tenancy by serving the person or entity to whom they most recently paid rent with notice personally, or by certified or registered mail.

 

Additionally, both §§ 1946 and 1946.1 impose the same statutory requirement for landlords to give notice of the consequences of abandoned personal property left behind in the premises by the tenant following a termination notice. This is usually accomplished as part of the notice of termination of tenancy that is served on the tenant.

 

Taken altogether, and as one might expect, the rules for non-residential property under CC § 1946 are more flexible and even-handed between the parties. In contrast, CC § 1946.1 requires much longer notice from landlords to tenants to terminate a tenancy, and with no opportunity to contract around the requirements. Knowing the difference between CC §§ 1946 and 1946.1 will help landlords understand whether their lease or the statute controls the tenancy termination procedures.

 

© 2019 by Fried & Williams LLP.  All Rights Reserved. The information contained in this article is general in nature. For advice on any particular matter, please consult with our attorneys because the facts of your situation may be unique and the law changes from time to time.

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