What is a Tenancy at Will in California?
In the recent case of Borden v. Stiles, the California appellate court explored the issues involving the tenancy at will in that case.
Defendant Loretta Stiles lived in a Laguna Woods residential unit (the property) that was owned by Dan Blechman. Stiles was permitted to live at the property by Blechman without provision for the payment of rent or the duration of her stay.
Stiles had worked for Blechman for many years and, instead of being paid a salary, he allowed her to live at the property beginning in 2011 and also paid her expenses.
After Blechman passed away, the administrator of his estate, plaintiff Alex R. Borden, served Stiles with a 30-day notice to quit the property.
After Stiles refused to leave the property, he filed an unlawful detainer action.
Borden filed a motion for summary judgment against Stiles. Stiles in turn filed a motion for summary judgment against Borden, arguing Borden’s notice to quit failed to state just cause for terminating her tenancy, as required by the California Tenant Protection Act of 2019 at Civil Code section 1946.2.
The parties agreed in their respective motions that Stiles had a tenancy at will.
The trial court concluded section 1946.2 applied to Stiles’s tenancy and consequently granted Stiles’s motion and denied Borden’s motion on the ground Borden’s 30-day notice failed to state just cause for terminating the tenancy as defined in the statute.
The Appellate Division of the Orange County Superior Court reversed the decision, and published its decision because its analysis involves the interplay of statutes enacted almost 150 years ago regarding the hiring of real property with the relatively recently enacted section 1946.2.
Evidence suggested the tenancy at issue was created by a hiring under section 1925, because it showed Blechman permitted Stiles to live at the property in exchange for work she had performed for him at unspecified times.
Such a tenancy that is “terminable at the pleasure of one of the parties,” however, would have terminated under section 1934 when Stiles was notified of Blechman’s death.
At that point, Stiles would have become a holdover tenant, and no longer in lawful occupation of the property.
Because section 1946.2, subdivision (i)(3) defines “‘[t]enancy’” to be “the lawful occupation of a residential real property”, section 1946.2 would not apply to such an unauthorized occupancy.
The record, however, is silent on the specifics regarding the timeframe in which Stiles performed work for Blechman in exchange for her tenancy, when Blechman passed away, when Stiles was notified of his death, and whether thereafter Borden had potentially entered into a tenant relationship with Stiles.
Because triable issues of material fact existed as to whether Stiles was in lawful occupation of the property within the meaning of section 1946.2, subdivision (i)(3), summary judgment should not have been entered in either party’s favor.
The relevant evidence offered by the parties in support of and in opposition to the motions was undisputed and very limited in scope, confirming the following facts:
(1) Blechman orally agreed to allow Stiles to take possession of the property without any specified term or reservation of rent;
(2) Stiles took possession of the property, had continuously occupied the property for more than 12 months, and had never paid money for her occupancy;
(3) Borden was made administrator of the estate of Dan Blechman;
(4) Borden served a 30-day notice to quit which did not state a just cause reason under section 1946.2; and
(5) after the notice period expired and Stiles continued to occupy the property, Borden initiated the unlawful detainer action.
The parties stipulated if section 1946.2 were to apply, none of the exemptions specified in that section would apply.
Unlawful detainer actions are authorized and governed by state statute. The statutory scheme is intended and designed to provide an expeditious remedy for the recovery of possession of real property.
The remedy is available in only three situations: to a lessor against a lessee for unlawfully holding over or for breach of a lease; to an owner against an employee, agent, or licensee whose relationship has terminated; and to a purchaser at an execution sale, a sale by foreclosure, or a sale under a power of sale in a mortgage or deed of trust against the former owner and possessor.
Section 1946.2, subdivision (a) provides in relevant part: “Notwithstanding any other law, after a tenant has continuously and lawfully occupied a residential real property for 12 months, the owner of the residential real property shall not terminate the tenancy without just cause, which shall be stated in the written notice to terminate tenancy.”
Subdivision (b) of section 1946.2 sets forth two types of just cause—at-fault just cause and no-fault just cause—necessary to terminate a tenancy. The following circumstances establish at-fault just cause: default in the payment of rent; a breach of a material term of the lease; maintaining, committing, or permitting the maintenance or commission of a nuisance; committing “waste”; the circumstance where the tenant had a written lease that terminated on or after January 1, 2020, and the tenant refused to execute a written extension or renewal of a lease with similar terms; certain criminal activity by the tenant; assigning or subletting the premises in violation of the lease; the tenant’s refusal to allow the owner to enter the property; using the premises for an unlawful purpose; an employee, agent, or licensee’s failure to vacate after their termination as an employee, agent, or licensee; and when the tenant fails to deliver possession of the residential property after providing the owner written notice of intent to terminate the hiring of the real property.
Section 1946.2 no-fault just cause includes the circumstances when the owner, or the owner’s spouse, domestic partner, children, grandchildren, parents or grandparents intend to occupy the residential real property; the withdrawal of the residential property from the rental market; an order for the owner to comply with certain orders by a governmental agency or local ordinances that necessitate vacating the property; and the owner’s intent to demolish or to substantially remodel the residential real property.
Section 1946.2 also requires an owner, under specified circumstances, to provide relocation assistance, waive rent for the final month of tenancy, and comply with notice requirements.
Significantly, section 1946.2, subdivision (i)(3) provides, for the purposes of that statute, the term tenancy means the lawful occupation of a residential real property and includes a lease or sublease.
After noting it was undisputed Stiles was a tenant at will, the trial court granted Stiles’s motion for summary judgment on the ground section 1946.2 applies to tenancies at will.
The Appellate Division affirmed the judgment after concluding section 1946.2 applies to tenancies at will if the tenant has continuously and lawfully occupied the subject residential real property for 12 months.
A tenancy at will is an estate which simply confers a right to the possession of premises leased for such indefinite period as both parties shall determine such possession shall continue.
The tenant at will is in possession by right with the consent of the landlord either express or implied, and he does not begin to hold unlawfully until the termination of his tenancy. His estate is a leasehold and he holds in subordination to the title of the landlord.
A permissive occupation of real estate, where no rent is reserved or paid and no time agreed on to limit the occupation, is a tenancy at will.
Here, Stiles’s tenancy may very well have been properly characterized as a tenancy at will in light of the undisputed evidence Blechman had provided Stiles a tenancy of indefinite duration that did not involve the payment of rent.
But the proper characterization of Stiles’s tenancy was not dispositive in the resolution of this appeal because evidence in the record, which showed Stiles might have hired the property from the now deceased Blechman, creates triable issues of material fact whether a condition precedent to section 1946.2’s application was satisfied—whether Stiles was in lawful occupation of the property within the meaning of section 1946.2(i)(3).
Upon Stiles receiving notice of Blechman’s death, if her tenancy was based on a hiring, it would have automatically terminated by operation of law.
Absent subsequent events that might have created a new tenancy (e.g., Borden and Stiles entering an agreement, Borden granting Stiles permission to continue occupancy, or Borden accepting rent from Stiles), Stiles’s status in continuing to occupy the property following receipt of notice of Blechman’s death would be that of a holdover tenant.
Such an occupancy would be unlawful, rendering section 1946.2 inapplicable to the eviction proceedings initiated by Borden, because tenancy is lawful occupation of residential real property.
The record, however, was silent regarding when Blechman passed away, when Stiles was notified of his death, and whether thereafter Borden had potentially entered into a new tenant relationship with Stiles.
While a tenancy at will is, by definition, an agreement whereby a tenant is granted permission to occupy real property without provision for the payment of rent, it would appear that definition does not preclude a landowner from giving possession and use of real property for a reward other than rent within the meaning of section 1925.
For example, an agreement whereby landowner son permitted father to remain on the land coupled with the father’s agreement to take care of the land could be deemed to establish a tenancy at will.
In any event, the evidence shows Stiles’s tenancy might have arisen out of a hiring, and if so, regardless of whether it was tenancy at will or some other form of tenancy, it would have terminated upon her receipt of notice of Blechman’s death, by operation of section 1934.
As triable issues of material fact therefore exist regarding the threshold issue whether Stiles was in lawful occupation of the property within the meaning of section 1946.2, subdivision (i)(3), summary judgment should not have been granted in favor of either party.
LESSONS:
1. While a tenancy at will is, by definition, an agreement whereby a tenant is granted permission to occupy real property without provision for the payment of rent, it would appear that definition does not preclude a landowner from giving possession and use of real property for a reward other than rent within the meaning of Civil Code section 1925.
2. If the tenancy at issue was created by a hiring under Civil Code section 1925, such a tenancy that is “terminable at the pleasure of one of the parties,” would have terminated under Civil Code section 1934 when notified of ther landlord's death. At that point, the tenant becomes a holdover tenant, and no longer in lawful occupation of the premises.