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Real Estate Today

Commercial Tenancy is Unlike Residential

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Robert S. Griswold | Steven R. Kellman | Ted Smith
22-Dec-1996 Sunday
(Page H-2 )

This column on issues confronting renters and landlords is written by Certified Property Manager Robert S. Griswold, host of KSDO Radio's "Real Estate Management Today!" (Saturdays, 2-4 p.m.) and by attorneys Steven R. Kellman, director of the Tenants Legal Center, and Ted Smith, principal in a law firm representing rental owners.

Q: I own a small bookstore and have been renting the first floor of a two-story commercial building for the last four years. Recently, a fencing studio rented the space directly above my store and the jumping, stomping and overall noise levels have severely impacted my business. I have spoken to both my landlord and the owner of the fencing studio and they indicate that there is nothing they can or will do. I have a quiet-enjoyment clause in my lease that indicates that I cannot create a disturbance or anything that would bother my neighbors. Don't I have the same rights?

A: Kellman: A commercial tenancy is very different from a residential one. For example, issues of habitability are generally not part of the landlord's responsibilities. Many times the tenant assumes much responsibility as to repairs and maintenance. Commercial uses, by their nature, generate noise levels unacceptable in a residential environment. In this case, the noise of the fencing studio is so high that the bookstore business is disrupted. The landlord's (and the fencing studio's) reliance on the commercial nature of the business has merit but may not be a complete shield from responsibility. Clearly, the bookstore is entitled to be able to conduct business. Also, the fencing studio, a lawful business, is entitled to conduct its business. However, if the landlord leases to a business that generates excessive noise, there might be some responsibility to assist in soundproofing the floor. Further, the fencing studio should participate in these expenses since it is generating the noise. While technically, the bookstore may be the innocent party in this situation, it may make good business sense for it to also participate in the expenses to some degree. Setting aside legal technicalities, efforts to reach a joint resolution would be the best and most cost effective solution. Each should contribute, with the larger shares from the fencing studio and then the landlord, until the problem is resolved. Still, this may become a legal matter where many times the sound correction costs are wasted on lawyers to see who, if anyone, should make those corrections.

Smith: Based on the facts you present, you'd be well advised to keep paying your rent and stop complaining. I am afraid you have not stated a legal cause of action -- at least for constructive eviction. The landlord in every lease must comply with the covenant of quiet enjoyment. But, unlike residential tenants, you may not withhold your rent. You will have a difficult time proving constructive eviction in this case. As you described it, the noise from the fencing studio (while affecting your book sales) is not substantial enough. Even if it were, your remedy under the law would be to vacate the premises. You then would be deemed to be constructively evicted, and you would have to relocate your bookstore. You could bring a lawsuit against the landlord for these damages. A better approach would be to try to settle the case or to remain in possession and take the landlord to court for your reduced book sales.

Griswold: You have a very difficult situation and one that I clearly believe is a potential minefield from a legal perspective. I strongly suggest that you ask for a meeting with your landlord and the fencing studio owner (maybe at your empty bookstore on a Saturday afternoon!) to seek an equitable resolution to the problem. All parties have plenty to lose and much to gain from a cooperative effort. An offer by you to share in even a portion of the costs may get a more favorable response. Of course, if your efforts fail you may seek compensation for your damages in small claims court. However, you may face a difficult challenge in quantifying your actual damages. I believe that your situation is also a prime candidate for alternative dispute resolution, such as mediation.

Q: I have two questions for you. First, on July 16, 1996, my landlord gave me a notice that my rent was to increase effective Aug. 1, 1996. I pay my rent bi-monthly with half on the 1st and half on the 15th. Isn't there a law that states the landlord may increase rent on a month-to-month tenancy only with a 30-day notice or more? My second question is, let's say this matter had gone to court. Wouldn't the judge rule in favor of the tenant due to the defective notice?

A: Kellman: In a month-to-month tenancy, the rent may be raised on a written 30-day notice that is properly served. A 30-day notice may be served at any time during the month, not only on the first. This rule generally does not apply to certain government subsidized housing and mobile homes. The rent adjustment does not take effect until the 30 days pass. Thus, a notice demanding rent at the new higher rate, before the 30 days expires, will be defective. Tenants should carefully read all notices from their landlord and seek advice for notices that seem wrong or raise any questions. Pity the poor tenant who loses an eviction case because he or she do not defend themselves when the eviction is based on a defective notice.

Smith: Steve is right. In month-to-month tenancies, the rent may be raised by 30 days written notice. But, Steve, tenants need to be a little more careful than you indicate. While the notice cannot legally raise the rent Aug. 1st, it is valid after 30 days, even though it states an earlier time. And, if the rent is paid bi-monthly (half on the first, half on the 15th), the tenancy could be construed as a two-week tenancy, not month-to-month. In that instance, a mere two-week notice of rental increase would be required. The vast majority of landlords serve correct notices and tenants would be well advised to follow them, or otherwise be subject to further legal proceedings, including eviction. What's more, most rental owners are not rent gougers, as some rent control advocates would have you believe. The responsible rental owner will carefully evaluate the rental increase process and realize that it's much better to have a good paying resident remain in possession rather than have a vacancy.

If you're a tenant or landlord, the authors stand ready to answer your questions through this column. The volume of mail prevents individual responses. Write them at: Rental Roundtable, Homes Section, San Diego Union-Tribune, P.O. Box 191, San Diego, CA 92112. Or you may e-mail them at rgriswold@retodayradio.com

Copyright Union-Tribune Publishing Co.

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Robert Griswold and the Real Estate Today! radio show strongly support the intent and the letter of all federal and state fair housing laws.  As a reminder to all owners and managers of real estate, note that all real estate advertised is subject to the Federal Fair Housing Act, which makes it illegal to advertise "any preference, limitation, discrimination because of race, color, national origin or ancestry, religion, sex, physical disability, or familial status, or  intention to make any such preference, limitation or discrimination." Additional state and/or local fair housing laws may also apply.  Be sure to inform all persons that all dwellings offered or advertised are on an equal opportunity basis.

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Revised and Updated - Wednesday, April 26, 2006

Robert S. Griswold, CRE, CPM, CCIM, PCAM, GRI, ARM
Griswold Corporate Center
Griswold Real Estate Management, Inc.
5703 Oberlin Drive, Suite 300
San Diego, CA 92121-1743
Phone: (858) 597-6100
Fax: (858) 597-6161

Email: rgriswold.ret@retodayradio.com

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