Real Estate Law Updates: Normal Business Hours / Tenant Insurance Liability

Real estate law update from J. Scott Souders, P.C., Attorney at Law:

For your review are brief summaries of new cases:

1.    Definition of Normal Business Hours Includes Weekend Open Houses

In the case of Dromy vs. Lukovsky 219 Cal App 4th 278, the Appellate Court affirmed a Declaratory Judgment of the trial judge that the definition of “normal business hours” contained within the Residential Lease Agreement and Residential Real Estate Sales Agreement includes necessary weekend open house appointments.

In this case, the tenant was able to tie up the landlord/owner for three years from showing the property for sale on weekends. The tenant lives in Santa Monica [of course he does]. The tenant claimed that he would not allow the landlord’s listing agent to show the house on weekends and would only allow private showings by appointment only. The tenant maintained that Civil Code Section 1954(b) only permitted the landlord to enter the property to show it to purchasers during normal business hours. The tenant, therefore, contended that normal business hours does not include Sundays as defined in state holidays under state law. The landlord filed a Complaint for Declaratory Relief asking the court to declare that in real estate business “normal business hours” includes Saturdays and Sundays. After three years of litigation the appeals court affirmed the trial judge’s ruling that the landlord could have two open houses per month on weekend days between 1:00 p.m. to 4:30 p.m. upon ten days advanced email notice.

Comment: How would you like this tenant? If you are a real estate salesperson and an owner it pays to screen prospective tenants to see if they have a litigious background by checking the plaintiff/defendant index in the counties where the prospective tenant has lived for the past ten years. Particularly in Santa Monica, with rent control, no tenant wants to risk losing comfortable accommodations close to the beach at way below market value.

2.    A Tenant Who Does Not Obtain Property Insurance Contrary to Their Lease Requirements is Not Held in Material Breach of the Lease.

Los Angeles. The tenant was required to maintain personal property insurance by the terms of the written Lease. For whatever reason, the landlord desired to have the tenant evicted. As part of a Three Day Notice to Perform Covenant or Quit, the landlord alleged that the tenant was in violation of the Lease by failing to maintain personal property insurance.

On the stand the tenant admitted that she never obtained personal property insurance and, therefore, was in violation of the Lease Agreement. The trial judge determined that this was not a material breach of the Lease. Therefore, the tenant did not forfeit the Lease and the tenant won the case. There was no evidence, according to the trial judge, that the tenant had any personal property that was worth insuring.

The Court of Appeal affirmed the trial judge’s decision that their was not a material breach. Therefore, the tenant did not lose her tenancy.

Comment: How would you like to have this landlord? It is not enough that the tenant pays rent in a timely manner, but the landlord attempted to use every little claim to evict the tenant. Obviously, the tenant was paying less than market rent or the landlord had some other motive of getting the tenant out. This is particularly true when the matter went all the way up to the Court of Appeal. Big bucks were spent on evicting this tenant to no avail.
Scott Souders is a real estate attorney who has practiced real estate law in excess of 37 years in Southern California.

Disclaimer: The Real Estate Law Update cites cases or statutes which are summarized and should not be relied upon without fully reading the cases or statute in the advance sheets and shepardizing the same and consulting with your own attorney.