Recent revisions of the law also contain additional duties for those business owners who are landlords and/or tenants. If the operator of the business, which has contamination, is the tenant in the building and is not reporting the release of these contaminants, the owner of the property is responsible for meeting these hazardous substance reporting requirements. Although these provisions are sure to be challenged in the courts by landlords and/or an amicus group on behalf of the landlords, property owners should consider significantly tightening lease provisions related to the tenant's obligation to notify both the regulatory agencies and the landlord in the event of any environmental "upset" event.
Landlords are at particular risk here where they have no day-to-day knowledge of releases which might occur during the course of the tenant's business. This is especially important where tenants are printing companies, medical facilities, dry cleaning operations and similar businesses which regularly have chemicals and/or biological contaminants on site.
Other cases affecting landlord tenant relations:
- The California Supreme Court has agreed to review a recent appellate decision that held that a tenant was responsible to remove asbestos containing fire-proofing material. The Court has not yet issued its opinion, so the appropriate rule of law remains uncertain. Landlords and tenants should keep in mind, that under present law, the tenant will pay for the cost of asbestos abatement when all of the following circumstances are present in the lease: (a) representations are set forth in the lease that the tenant has examined the premises and that the landlord has made no representations concerning the condition of the premises; (b) a release of the landlord from all obligations to repair and maintain the premises; and (c) a provision whereby the tenant assumes all of the risks of loss to persons or property.
- The Courts of Appeal have held that a tenant is liable for the landlord's cost in remedying Building Code violations where the tenant sublet his property and the subtenant improperly installed improvements and alterations to the premises.
- In another recent decision which is eminently reasonable, when the last day for the tenant to pay or quit falls on a Saturday, Sunday or holiday, the tenant now has until the next business day to quit and pay the rent demanded or vacate the premises.
- Effective January 1, 1994, landlords are now subject in the event of a bad faith claim by a tenant for recovery of their security deposit, landlords are now subject to the actual damages plus a $600 penalty, which is an increase over the $200 penalty previously applied. However, landlords are now allowed three weeks from the time a demand is made by a tenant to furnish a statement regarding the use of security deposits.
- Additionally, the Civil Code has been amended to eliminate the right of a landlord to recover treble damages for damages to the premises. This section was also amended to provide that the landlord is entitled to recover the actual damages done by the tenant plus a maximum of $600.
- Business owners who own property presently in areas subject to Mello-Roos Districts may already be aware that over the last several years special disclosure requirements have been applied where property is transferred subject to a Mello-Roos District. Effective January 1993, this requirement of disclosure is extended to apply to the types of disclosures which must be made by landlords to their tenants where the commercial/residential lease exceeds five years. There are specific types of disclosures required where property is located in the Mello-Roos District and in the event that a significant lease is being considered, you should consult counsel immediately.