Unfortunately in this economic climate, some tenants are unable to maintain their businesses and sustain their financial responsibilities.   Tenants are defaulting under their leases in ever greater numbers.  In order to ensure that obligations are met, landlords have several options to recover some of these losses.  One such remedy is the use of California Civil Code § 1951.2 and § 1951.4.  These code sections allow the landlord to recover rent and other charges that may be lost due to a tenant’s default.

            California Civil Code §1951.2 allows the landlord to substitute his ongoing right to rent under the lease into a legal claim for damages due to the abandonment of the premises by the tenant.  Under this code section, a landlord is entitled to the entire future rental stream now.  It doesn’t have to wait for the future rent to come due to collect it.  Alternatively, a landlord can also maintain the tenant’s right to possession and recover damages as they are incurred.  This remedy is found in California Civil Code §1951.4.   Under California law, these remedies are mutually exclusive, but offer powerful relief for landlords.  It should be noted that application of these remedies is only available to landlords who have included them in their leases. 

These codes section do carry with them an obligation on the landlords to mitigate their damages through such methods as advertising the available space and attempting to find a suitable replacement tenant.  Sections 1951.2 and 1951.4 provide another avenue for landlords to recover lost investments due to defaulting tenants and an uncertain economy.

Please contact Kevin Dollison at (916) 514 – 0547 if you have any questions regarding the remedies under your lease for tenant default.