LANDLORD’S BAD FAITH IN REJECTING RENT CHECK THAT IS ONE PENNY SHORT IS A DEFENSE TO AN UNLAWFUL DETAINER ACTION

In J.S. BAWA v Terhune, decided by the Appellate Division of the Superior Court of California for the County of Los Angeles on January 30, 2019, a landlord filed an unlawful detainer action against a tenant of a rent-controlled unit because the tenant’s rent payment was one penny short. The tenant owed $507.61 for the month of June 2017 consisting of monthly rent in the amount of $504 and a City of Los Angeles Systematic Code Enforcement (SCEP) fee in the amount of $3.61. The tenant mailed a check to the landlord for $507.60 (one penny short). The landlord returned the check with a letter stating “we are returning your check…since the rent amount is incorrect.” On June 13, 2017, the landlord served  the tenant with a Three-Day Notice to Pay Rent or Quit for $507.61. After expiration of the notice, the tenant sent the landlord two checks, one dated June 20, 2017 in the amount of $507.61 and one dated June 25, 2017 in the amount of $519.86. The landlord did not deposit the checks. Instead, the landlord proceeded with an unlawful detainer action. After a jury trial, the court entered judgment for the tenant. The landlord appealed. The Appellate Division of the Los Angeles Superior Court affirmed the jury verdict citing the principal that a “trivial” or “de minimis” breach of a rental obligation is not sufficient ground for termination of a tenancy. In that regard, the court stated “[W]hen a landlord refuses to accept rent that is one penny short of the required amount, without any legitimate intent other than the manufacture a default in order to evict a tenant, a tenant may assert the landlord’s bad faith as an unlawful detainer defense.”

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The law firm of Ruzicka, Wallace & Coughlin, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.

April 6, 2019 | Landlord-Tenant Law |