Hello, we are the business that is leasing the entire building from the landlord. There is a small retail business downstairs (ours) and two 1-bdrm apartments upstairs. The upstairs tenants were already here when we began our lease and it is not in our lease with our landlord that we have tenants (but he knows about them and is okay with them up to this point verbally). Those upstairs tenants do hold a written month-to-month lease with us.
Our lease has recently gone up and now we are on a month-to-month lease. The landlord has demanded that we evict those tenants upstairs, or else we do not get another long-term lease.
The tenants refuse to leave stating that they are under the Los Angeles Rent Control protection laws. They have paid rent timely. The checks are made out to our business. They are asking for “cash-for-keys” for 15000 when there monthly rent is 1350 each apartment.
Does that apply here and how do we go about evicting those tenants?
If the upstairs units are truly subject to the Los Angeles Rent Stabilization Ordinance, the tenants would be entitled to relocation assistance payments if they are being asked to move out through no fault of their own. The amount of relocation assistance is substantial, the amount depending on how long the tenants have been there, whether they qualify under HUD, and whether this is considered a "mom and pop" property. See https://hcidla.lacity.org/Relocation-Assistance and the link at the bottom for the current Relocation Assistance Bulletin.
Paying the upstairs tenants to move out may be the fastest, surest method in lieu of trying to serve a 60 day notice of termination of month to month tenancy, followed by filing and pursuing an unlawful detainer lawsuit (taking 2 or 3 months) that may or may not work.
Frank W. Chen has been licensed to practice law in California since 1988. This posting does not create any attorney-client relationship. The information presented here is general in nature and is not intended nor should be construed as legal advice for any particular case or client. For specific advice about your particular situation, please consult with your own attorney. This posting is not intended to constitute an advertisement nor a solicitation.
You are in a negotiation and should invest in representation from an experienced commercial leasing resource, either an attorney or broker.
The issue is not about the subtenants, but overall performance of real estate asset for the building owner. He wants you to take over the burden of dealing with upstairs tenants in order to maximize his income and value. He might also want you to take over structural maintenance (for example). And you might agree, in exchange for a long-term lease that allows your business to grow, thrive, and earn a proper return on capital expenditures made on the property.
You need help looking at this situation from a high altitude, in purely business terms. Part of the analysis should include relocation options, which is why you should have a great broker involved. If your business is retail, you need a retail expert.
I repeat, this situation is a business negotiation, and not about landlord tenant law. The law influences the expense factors, but should not drive your actions. Do not let landlord buffalo you into taking on responsibility to evict upstairs tenants unless you get something of significant value in return, like a 10-year lease with options to extend at fixed known rents. If landlord won't entertain such ideas, then you are being played, and should work on an exit plan for your business.
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