What are the Requirements for a 3-Day Notice to Pay Rent or Quit in California?

In the recent decision on Eshagian v. Cepeda, the California appellate court transferred the case from the appellate division of the superior court to decide whether a tenant can appeal a judgment for possession in an unlawful detainer proceeding if the landlord has outstanding damages claims that have not been adjudicated.

The answer is no. If the landlord’s complaint seeks damages, the possession-only judgment is not appealable because it does not resolve all rights of the parties.

When the tenant defaulted on the complaint, the tenant’s options are limited. But the tenant does have recourse.

The tenant can file a petition for writ of mandate under Code of Civil Procedure section 1086, which requires a showing that there is no adequate remedy in the ordinary course of law or that the petitioner would otherwise suffer irreparable injury.

Because a defaulted tenant has no right to appeal a possession-only judgment and no ability to obtain a final judgment, the tenant will be able to show there is no other adequate remedy in the ordinary course of law, entitling the tenant to a determination of the writ petition on the merits as a matter of right.

In this case, the possession-only judgment entered against the defaulted tenant, Manuel Cepeda, is not appealable. However, given the uncertainty of the law on appealability at the time Cepeda filed his appeal, the appellate court treated the appeal as a petition for writ of mandate to avoid any further delay.

The appellate court concluded the three-day notice to pay rent or quit served by the landlord,

Joseph Eshagian, pursuant to section 1161, subdivision (2) (section 1161(2)), was invalid for failure to make clear by when and how Cepeda had to pay the rent, and that Cepeda would lose possession of the premises if he did not timely cure the default.

Accordingly, Eshagian’s complaint incorporating the three-day notice failed to state a cause of action for unlawful detainer.

The trial court was ordered to vacate the judgment in favor of Eshagian and to enter a new judgment in favor of Cepeda.

Eshagian leased to Cepeda a residential unit in Van Nuys (the premises). Pursuant to the lease agreement, Cepeda was required to pay $1,000 a month in rent. 

On December 20, 2022, Eshagian served Cepeda with a “3 Day Notice To Pay or Quit.

The notice stated Cepeda owed a total of $8,000 in unpaid rent due from April 1 to November 1, 2022. The notice specified the rent was to be paid to Eshagian by check, cashier’s check, or money order; it listed the address of Cepeda’s unit as the “[a]ddress to where rent may be delivered”; and it stated the rent could be delivered any day of the week from 8:00 a.m. to 9:00 p.m.

The notice did not specify the date on which the three-day notice commenced (simply listing “12/19/2022” on the notice to the left of Eshagian’s signature with no explanation), nor did it state that Cepeda would lose possession of the premises if he did not pay the amount due by a specified date.

On December 27, 2022, Eshagian filed a verified unlawful detainer complaint alleging Cepeda did not pay the rent due.

The complaint sought possession of the premises, forfeiture of the lease, unpaid rent of $8,000, holdover damages in the amount of $33.33 per day from the date of expiration of the three-day notice until the date of judgment, and reasonable attorneys’ fees.

The complaint attached a copy of the three-day notice and proof of service as an exhibit.

On January 9, 2023 Cepeda, representing himself, filed an answer in which he denied the allegations he had not paid the rent since April 2022, he unlawfully continued in possession of the premises, and he owed $33.33 per day for use and occupancy of the premises.

Cepeda also asserted affirmative defenses, including that Eshagian breached the warranty of habitability and violated the COVID-19 Tenant Relief Act and local COVID- 19-related ordinances.

In late January and early February 2023, Eshagian filed several motions to compel discovery responses.

On March 8, 2023, the trial court granted the motions and ordered Cepeda to respond to Eshagian’s discovery requests.

On March 21, Eshagian filed a motion for terminating sanctions based on Cepeda’s failure to comply with the court’s discovery orders.

Cepeda did not file an opposition to the motion. Cepeda’s attorney appeared at the hearing but did not present any argument, stating only that “[w]e have nothing to add to the court record.”

The court granted the motion for terminating sanctions and ordered that Cepeda’s answer be stricken.

On April 28, 2023, at Eshagian’s request, the court clerk entered a default against Cepeda.

On May 2, 2023 Eshagian filed a request for a clerk’s judgment on Judicial Council form CIV-100, checking the boxes requesting the clerk to “[e]nter clerk’s judgment . . . . ¶ . . . for restitution of the premises only and issue a writ of execution on the judgment.”

Eshagian did not request any monetary damages.

On May 3, 2023, the court clerk entered a clerk’s judgment against Cepeda on Judicial Council form UD-110, checking boxes indicating the judgment was for “possession only.” The area of the form reserved for the amount of damages awarded had the words “possession only” written across the section. (Boldface and capitalization omitted.)

On May 19, 2023, Cepeda filed a motion to set aside and vacate the possession-only judgment pursuant to section 663.

Cepeda argued the three-day notice did not comply with section 1161(2), and therefore the complaint failed to state a cause of action. Thus, he asserted, the trial court erred in entering the default judgment.

On June 5, 2023, the trial court denied the motion to vacate, stating Cepeda should have raised the deficiencies in the three- day notice prior to entry of the possession-only judgment.

Cepeda timely appealed the possession-only judgment and the order denying the motion to vacate to the appellate division of the superior court.

Cepeda argued in the appellate division that the trial court erred in entering the judgment because the three-day notice was defective.

Eshagian asserted the possession-only judgment was not appealable because Eshagian’s damages claims were still pending and there was no final judgment. Cepeda urged the appellate division, if the possession-only judgment was not appealable, to treat the appeal as a petition for writ of mandate.

In its September 18, 2024, published opinion, the appellate division held the possession-only judgment was appealable. The appellate division recognized that Eshagian’s damages claims were still pending in the trial court, but it found “[u]nder the unique circumstances of this case, the default judgment entered by the court was a final, appealable judgment.”

Turning to the merits, the appellate division concluded the three-day notice was deficient because it failed to identify when the notice period commenced, did not give the address where the rent payment should be sent (instead listing Cepeda’s unit number), and did not make clear that Eshagian would demand possession of the premises if the rent was not paid within the prescribed time.

Therefore, the complaint, which incorporated the three-day notice, did not state a cause of action.

The appellate division reversed the judgment and dismissed the appeal from the denial of the motion to vacate.

Unlawful detainer is a statutory remedy whose primary feature is its expedited procedure for the recovery of possession of real property wrongfully withheld or detained.

Accordingly, in an unlawful detainer proceeding, the only triable issue is the right to possession and incidental damages resulting from the unlawful detention.

When a defendant in an unlawful detainer proceeding fails to appear or answer the complaint, section 1169 provides that the clerk, upon written application of the plaintiff and proof of the service of summons and complaint, shall enter the default of any defendant so served, and, if requested by the plaintiff, immediately shall enter judgment for restitution of the premises and shall issue a writ of execution thereon.”

Further, after entry of the judgment for possession, the plaintiff may apply to the court for any other relief demanded in the complaint, including the costs, against the defendant, or defendants, or against one or more of the defendants.

If a default is entered on the complaint, the case continues as an unlawful detainer proceeding.

In non-default cases, if possession of the property has been delivered to the lessor before judgment is entered, the proceeding continues as an ordinary civil action.

No published cases have addressed the appealability of a possession-only judgment entered after a tenant’s default in an unlawful detainer proceeding in which the complaint sought damages in addition to possession.

The Unlawful Detainer Act [(§§ 1159-1179a)] governs the procedure for landlords and tenants to resolve disputes about who has the right to possess real property. Given the need for quick, peaceful resolutions of unlawful detainer actions, the statutory procedures must be strictly adhered to, including the stringent requirements for service, notice, and filing deadlines.

Section 1161(2) provides that a tenant is guilty of unlawful detainer when the tenant continues in possession of a rental property without the permission of the landlord after default in the payment of rent.

When the tenant continues in possession, service of a valid three-day notice to pay rent or quit is a prerequisite to an unlawful detainer action.

The notice’s purpose is to inform the tenant of the breach so the tenant can rationally choose whether to cure the breach and retain possession, quit the property, or contest the allegations.

Section 1161(2) requires that the three-day-notice be in writing, state the amount of rent due, and include specified information regarding how the rent may be paid.

Because of the summary nature of an unlawful detainer action, a notice is valid only if the lessor strictly complies with the statutorily mandated notice requirements

In addition to requiring specific information regarding how rent is to be paid, the notice must be framed in the alternative, viz., pay the rent or quit.

The statute clearly requires that a notice first be given to the delinquent tenant that in the event of the failure of the tenant to make payment of delinquent rent the plaintiff will exercise his right under the law to regain possession of the premises 

Section 1161(2) further provides as to payment to an individual that if the address does not allow for personal delivery, then it shall be conclusively presumed that upon the mailing of any rent or notice to the owner by the tenant to the name and address provided, the notice or rent is deemed received by the owner on the date posted, if the tenant can show proof of mailing to the name and address provided by the owner.

Finally, a landlord cannot prevail in an unlawful detainer proceeding unless the three-day-notice was properly served and the tenant has not paid the rent due within the three-day period.

If the landlord does not strictly comply with the requirements for a three-day notice, the landlord cannot prevail in an unlawful detainer action, and instead, a landlord’s remedy is an ordinary suit for breach of contract with all the delays that remedy normally involves and without restitution of the demised property.

The three-day notice in this case was deficient in three respects.

First, the notice was titled, “3 Day Notice To Pay Or Quit,” but it did not state that Eshagian would repossess the premises if Cepeda did not pay rent prior to expiration of the three-day notice period.

The mere use of the words “pay or quit” in the title of the document was insufficient to “clearly, positively, and unequivocally” place Cepeda on notice that he was facing imminent eviction.  

Second, the notice did not state when the notice period commenced or ended, nor did it inform Cepeda that the three-day period excluded weekends and judicial holidays. The notice appears to have provided the date it was signed by Eshagian but not when the notice was served, which commenced the three-day period.

The notice is dated December 19, 2022, but the complaint alleged the notice was served “[o]n or about December 20, 2022.” Absent this information, an ordinary tenant would not have reasonably understood the deadline by which the tenant needed to pay the rent due to avoid forfeiture of the premises.

Third, the notice was deficient because it did not provide a clear address where rent could be paid, as required by section 1161(2). The address listed on the notice was the leased premises where Cepeda lived.

By directing Cepeda to deliver the rent to Eshagian at the unit where Cepeda lived, and specifying that the rent could be delivered to Eshagian between 8:00 a.m. and 9:00 p.m. (when presumably Eshagian would not be in the rental unit), the notice did not meet the Legislature’s stated purpose “to avoid confusion and ‘protect both landlords and tenants alike, by setting forth clear rules for payment to whom and where.

Because the three-day notice failed to strictly comply with section 1161(2), Eshagian failed to state a cause of action for unlawful detainer, and the possession-only judgment must be reversed. 

LESSONS:

1.         Unlawful detainer is a statutory remedy whose primary feature is its expedited procedure for the recovery of possession of real property wrongfully withheld or detained.

2.         Accordingly, in an unlawful detainer proceeding, the only triable issue is the right to possession and incidental damages resulting from the unlawful detention.

3.         Section 1161(2) provides that a tenant is guilty of unlawful detainer when the tenant continues in possession of a rental property without the permission of the landlord after default in the payment of rent.

4.         When the tenant continues in possession, service of a valid three-day notice to pay rent or quit is a prerequisite to an unlawful detainer action.

5.         If the landlord does not strictly comply with the requirements for a three-day notice, the landlord cannot prevail in an unlawful detainer action, and instead, a landlord’s remedy is an ordinary suit for breach of contract with all the delays that remedy normally involves and without restitution of the demised property.

6.         The notice must state that the landlord would repossess the premises if the tenant did not pay rent prior to expiration of the three-day notice period.

7.         The notice must state when the notice period commenced or ended, and it must inform the tenant that the three-day period excluded weekends and judicial holidays.

8.         The notice must provide a clear address where rent could be paid, as required by section 1161(2).