Commercial Tenant Default & Lease Termination Demands

California Commercial Landlord Enforcement

📩 Received a Commercial Lease Default Demand? If you're a commercial landlord who received a tenant demand, see my guide on How to Respond to Commercial Tenant Demands →
California Commercial Lease Law
Commercial vs. Residential Leases: Commercial leases in California are governed primarily by contract law, not the strong tenant protections of residential landlord-tenant law. Commercial leases are negotiated agreements between sophisticated parties, and courts generally enforce lease terms as written. There is no implied warranty of habitability for commercial properties.
Common Commercial Lease Defaults
Default Type Landlord Remedy Cure Period (Typical)
Nonpayment of Rent 3-Day Notice to Pay or Quit; unlawful detainer 3 days (per CCP § 1161)
Nonpayment of CAM, taxes, insurance Demand letter; default notice per lease; lawsuit Per lease (often 10-30 days)
Unauthorized Use or Alteration 3-Day Notice to Cure or Quit; injunction 3 days or per lease
Violation of Use Clause Notice of default; termination per lease Per lease (often 30 days)
Assignment/Sublease without Consent Notice of default; termination; eviction Per lease; may be incurable
Waste or Property Damage Notice of default; damages; termination Per lease or immediate
Failure to Maintain Insurance Notice of default; landlord obtains insurance, charges tenant Per lease (often 10 days)
Bankruptcy Filing Complex; automatic stay applies; consult attorney N/A
Lease Default & Termination Clauses

Commercial leases typically include detailed default provisions:

  • Events of Default: Specific actions or failures that constitute default (nonpayment, lease violations, bankruptcy, abandonment)
  • Notice & Cure Period: Landlord must provide written notice; tenant has specified time to cure (often 3-30 days depending on default type)
  • Remedies: Landlord's rights upon default (terminate lease, re-enter premises, sue for damages, accelerate rent)
  • Waiver of Jury Trial: Many commercial leases waive right to jury trial in disputes
  • Attorney Fees: Prevailing party recovers attorney fees
  • Late Fees & Interest: Penalties for late rent (e.g., 5% late fee, 10% annual interest)
Notice Requirements (CCP § 1161)

For unlawful detainer (eviction) based on nonpayment of rent:

  • 3-Day Notice to Pay Rent or Quit: Must state exact rent amount owed and demand payment within 3 days or tenant must vacate
  • Form: Same notice requirements as residential (exact amount, correct service, no inclusion of non-rent charges)
  • Service: Personal, substituted, or post-and-mail per CCP § 1162

For curable lease violations:

  • 3-Day Notice to Perform Covenant or Quit: Describe violation and demand tenant cure within 3 days or vacate
  • Incurable Violations: 3-Day Unconditional Notice to Quit (e.g., assignment without consent, waste)
⚠️ Follow Lease Notice Requirements: Many commercial leases require specific notice procedures beyond statutory minimums (e.g., 10-day cure period for non-rent defaults, certified mail to specific address). Failure to follow lease-required notice procedures may void your termination.
Landlord's Remedies Upon Default

California commercial landlords have several remedies (Civil Code § 1951.2, 1951.4):

  • Continue Lease & Sue for Rent: Do not terminate; tenant remains liable for rent as it becomes due
  • Terminate & Sue for Damages: End lease; sue for unpaid rent, future rent (present value), re-letting costs, attorney fees
  • Re-Enter & Re-Let: Retake possession, re-let to new tenant, hold defaulting tenant liable for deficiency
  • Unlawful Detainer (Eviction): File lawsuit to recover possession; obtain judgment for unpaid rent and possession
Mitigation of Damages

California landlords have duty to mitigate damages by making reasonable efforts to re-let the premises after tenant default:

  • Must market property and attempt to find replacement tenant
  • Cannot simply let property sit vacant and sue for full rent through end of lease term
  • Mitigation efforts must be reasonable (advertise, show property, accept qualified tenants)
  • Tenant remains liable for unpaid rent and difference between original rent and new tenant's rent
Common Commercial Tenant Defaults
1. Nonpayment of Rent
Most Common Default: Tenant fails to pay base rent when due. Commercial leases typically require rent on 1st of month, with late fees accruing after 3-5 day grace period.

Late Rent Scenarios:

  • Tenant regularly pays 5-10 days late (chronic late payment pattern)
  • Tenant claims business downturn and requests rent deferral or reduction
  • Tenant disputes rent amount or claims landlord breached lease
  • Tenant simply stops paying with no communication
2. Nonpayment of Additional Rent (CAM, Taxes, Insurance)

In triple net (NNN) leases, tenant must pay share of:

  • CAM (Common Area Maintenance): Property management, landscaping, parking lot maintenance, common area utilities
  • Property Taxes: Tenant's pro rata share of real property taxes
  • Insurance: Tenant's share of building insurance premiums

Common Disputes:

  • Tenant disputes CAM reconciliation (claims charges are inflated or not properly allocated)
  • Tenant refuses to pay tax or insurance increases
  • Tenant claims certain CAM charges are capital improvements (not operating expenses)
3. Unauthorized Use or Alteration

Tenant violates "use" clause or makes unauthorized modifications:

  • Use Violations: Lease specifies "retail clothing store," but tenant operates restaurant (different use, different insurance risk, may violate zoning)
  • Unauthorized Alterations: Tenant removes walls, installs heavy equipment, or makes structural changes without landlord approval
  • Signage Violations: Tenant installs unapproved exterior signs, neon lights, or banners
  • After-Hours Use: Tenant operates 24/7 when lease permits only daytime hours
4. Assignment or Sublease Without Consent

Tenant transfers lease rights without landlord's written approval:

  • Tenant subleases part of space to another business
  • Tenant sells business and assigns lease to buyer without landlord consent
  • Tenant allows another entity to operate under tenant's lease
Landlord Consent Required: Most commercial leases prohibit assignment or sublease without landlord's prior written consent (which cannot be unreasonably withheld). Unauthorized transfers are material breaches often treated as incurable.
5. Failure to Maintain Insurance

Tenant fails to maintain required insurance coverage:

  • General liability insurance lapses
  • Tenant does not name landlord as additional insured
  • Coverage limits below lease requirements (e.g., $1M required, tenant has $500K)
  • Tenant fails to provide proof of insurance (certificates) annually
6. Waste, Damage, or Failure to Maintain

Tenant causes property damage or fails to maintain premises:

  • Tenant damages floors, walls, or fixtures through misuse or neglect
  • Tenant fails to perform required maintenance (e.g., HVAC filter changes, landscaping, trash removal)
  • Tenant allows property to deteriorate (hoarding, unsanitary conditions)
  • Tenant removes landlord's fixtures or trade fixtures without right to do so
7. Abandonment

Tenant vacates premises before lease term ends without notice:

  • Tenant closes business, removes all inventory, and stops paying rent
  • Tenant leaves property unsecured, creating security and liability risks
  • Tenant owes significant back rent and cannot be located
⚠️ Abandonment Procedures: California law (Civil Code § 1951.3) allows landlords to re-enter abandoned premises after serving notice. However, must follow specific procedures to avoid wrongful eviction claim if tenant did not actually abandon.
8. Bankruptcy Filing

Tenant files Chapter 7, 11, or 13 bankruptcy:

  • Automatic Stay: Landlord cannot proceed with eviction or collection without bankruptcy court approval
  • Assume or Reject Lease: Tenant (or trustee) can assume lease (cure defaults and continue) or reject lease (terminate and return property)
  • Adequate Protection: Landlord can request court order requiring tenant to pay rent during bankruptcy or provide security
How to Write Commercial Lease Default Demand Letters
Step 1: Review Lease Default & Notice Provisions

Before drafting demand letter, review lease carefully:

  • What constitutes an "Event of Default"? (Section usually titled "Default," "Events of Default," or "Tenant's Default")
  • What notice is required? (e.g., "10 days' written notice," "certified mail," specific address)
  • Is there a cure period? How long?
  • What are landlord's remedies upon default? (termination, damages, attorney fees)
  • Are any defaults incurable? (e.g., bankruptcy, assignment without consent)
Step 2: Determine Notice Type
Notice Type When to Use
Informal Demand Letter First-time late rent; minor lease violation; preserve relationship
Formal Notice of Default (Per Lease) Serious or repeated violations; required by lease before termination
3-Day Notice to Pay Rent or Quit Nonpayment of rent; precursor to unlawful detainer
3-Day Notice to Perform Covenant or Quit Curable lease violations (unauthorized use, failure to maintain)
3-Day Unconditional Notice to Quit Incurable violations (assignment without consent, waste, repeat violations)
Notice of Lease Termination After cure period expires without cure; formal termination of tenancy
Step 3: Demand Letter Components
Component What to Include
Header Landlord name, address, contact; tenant name, business name, premises address
Subject Line "Notice of Default," "Demand for Payment of Rent," or "Notice of Lease Violation"
Lease Identification Date of lease, parties, premises address, term
Description of Default Specific lease provision violated, dates, amounts owed, actions taken or not taken
Demand for Cure Exactly what tenant must do (pay $X by [date], cease unauthorized use, obtain insurance, etc.)
Cure Deadline Specific date by which tenant must cure (per lease or statute)
Consequences of Non-Cure Lease termination, eviction, lawsuit for damages, acceleration of rent, attorney fees
Reservation of Rights State that landlord reserves all rights and remedies under lease and law
Attorney Fees Notice If lease allows, state tenant will be liable for attorney fees if litigation required
Step 4: Delivery Per Lease Requirements
  • Check Lease Notice Clause: Lease may require certified mail, overnight delivery, email, or multiple methods
  • Send to Correct Address: Use notice address specified in lease (may be different from premises address)
  • Multiple Recipients: Send to tenant, any guarantors, and tenant's attorney if known
  • Proof of Delivery: Use certified mail with return receipt, FedEx/UPS with signature confirmation
  • Keep Copies: Retain copies of letter, proof of mailing, and delivery receipts
Step 5: Follow-Up Actions

If Tenant Cures:

  • Send confirmation letter acknowledging cure and stating lease remains in effect
  • Document cure (e.g., receipt of payment, certificate of insurance, photos of corrected violation)
  • Note default in tenant file for future reference

If Tenant Fails to Cure:

  • Send Notice of Lease Termination (if not already sent)
  • For rent defaults: serve 3-Day Notice to Pay Rent or Quit; file unlawful detainer
  • For other defaults: proceed with lease termination per lease terms; file unlawful detainer or breach of contract lawsuit
  • Begin mitigation efforts (market property for re-letting)
⚠️ Waiver Risk: Accepting rent or continuing lease relationship after tenant default without reserving rights may waive your right to terminate based on that default. Always include "Landlord's acceptance of rent does not waive this default" language.
Sample Commercial Lease Default Demand Letters
Sample 1: Nonpayment of Rent
[Landlord Name / LLC] [Address] [Phone] [Email] [Date] [Tenant Name / Business Entity] [Premises Address] [City, State ZIP] SENT VIA CERTIFIED MAIL AND EMAIL RE: NOTICE OF DEFAULT – NONPAYMENT OF RENT Lease dated [Date] for premises located at [Address] Dear [Tenant Name]: This letter constitutes formal notice that you are in default of your lease obligations. LEASE IDENTIFICATION: Landlord: [Your Name/Entity] Tenant: [Tenant Name/Entity] Premises: [Address], approximately [X] square feet Lease Date: [Date] Lease Term: [Start Date] through [End Date] DEFAULT: As of [Date], you have failed to pay rent for the following period(s): • [Month Year]: $[Amount] (due [Date]) • Late fees (per Lease § [X]): $[Amount] • Interest (per Lease § [X]): $[Amount] TOTAL AMOUNT DUE: $[Total] Under Section [X] of the Lease, you are required to pay base rent of $[Amount] per month, due on the first day of each month. You have failed to pay rent for [X] month(s), constituting a material breach of the Lease. DEMAND FOR PAYMENT: Pursuant to Section [X] of the Lease, you are hereby given [10] days from the date of this notice to cure this default by paying the full amount of $[Total]. Payment must be received by [Deadline Date] in the form of: • Cashier's check or money order payable to [Landlord Name] • Delivered to: [Address] [OR: Wire transfer to account [details]] CONSEQUENCES OF FAILURE TO CURE: If you fail to pay the full amount owed by [Deadline Date], the Lease will be terminated, and I will exercise all available remedies, including but not limited to: 1. Immediate termination of the Lease and your right to occupy the premises 2. Filing an unlawful detainer (eviction) action to recover possession 3. Pursuing a lawsuit for breach of contract seeking: - All unpaid rent through the date of termination - Future rent for the remainder of the Lease term (discounted to present value per Civil Code § 1951.2) - Late fees, interest, and costs of re-letting the premises - Attorney fees and court costs (per Lease § [X]) As of [Date], if the Lease is terminated, you will owe approximately $[Estimated Amount] in damages (unpaid rent + future rent through [Lease End Date] + re-letting costs). RESERVATION OF RIGHTS: This notice does not waive any other defaults or breaches under the Lease. Landlord reserves all rights and remedies available under the Lease and California law. If I accept any rent payment from you after this notice, such acceptance shall not constitute a waiver of this default or my right to terminate the Lease and pursue remedies if full payment is not received by the deadline. TIME IS OF THE ESSENCE. Pay the full amount owed immediately to avoid lease termination and litigation. Sincerely, [Your Signature] [Your Name] [Title] CC: [Guarantor, if applicable]
Sample 2: Unauthorized Use Violation
[Landlord Name / LLC] [Address] [Phone] [Email] [Date] [Tenant Name / Business Entity] [Premises Address] SENT VIA CERTIFIED MAIL RE: NOTICE OF DEFAULT – UNAUTHORIZED USE OF PREMISES Lease dated [Date] Dear [Tenant Name]: You are in material breach of your Lease due to unauthorized use of the premises. VIOLATION: Section [X] of the Lease ("Permitted Use") states: "Tenant shall use the Premises solely for [specific permitted use, e.g., 'retail sale of clothing and accessories'] and for no other purpose without Landlord's prior written consent." I have observed and confirmed that you are operating [unauthorized use, e.g., "a restaurant with full kitchen, grills, and deep fryers"] at the Premises. This violates the Permitted Use clause. DATES OF VIOLATION: On [Date], I inspected the Premises and observed [describe what you saw: commercial cooking equipment, strong food odors, restaurant seating, etc.]. On [Date], I received complaints from neighboring tenants about [smoke, odors, grease, increased trash, etc.]. On [Date], I reviewed your social media and website, which advertise the Premises as a restaurant. CONSEQUENCES OF UNAUTHORIZED USE: Your unauthorized use: • Violates the terms of the Lease • Violates the shopping center's use restrictions and CC&Rs • Increases fire risk and insurance liability • Requires different zoning approval and health permits • Interferes with other tenants' exclusive use rights (Tenant [X] has exclusive right to operate restaurant in the center) DEMAND TO CURE: You must immediately cease the unauthorized restaurant use and restore the Premises to the permitted use (retail clothing sales) within 10 days of this notice. Alternatively, if you wish to continue operating a restaurant, you must: 1. Submit a written request for Landlord's consent to change the permitted use 2. Provide proof of required health permits, fire safety inspections, and liability insurance ($2M minimum) 3. Pay increased rent reflecting the higher-risk use (to be negotiated) 4. Obtain consent from neighboring tenant [X] who holds exclusive restaurant rights I am not obligated to consent to this change of use. DEADLINE: You must cure this violation by [Date – 10 days from notice] by ceasing restaurant operations and returning to retail use. CONSEQUENCES OF NON-COMPLIANCE: If you fail to cure within 10 days, the Lease will be terminated, and I will: • File an unlawful detainer action for breach of lease • Seek injunctive relief prohibiting continued unauthorized use • Sue for damages, including loss of rent from other tenant [X] who may terminate due to your violation of their exclusive • Recover attorney fees and costs Cease unauthorized use immediately. Sincerely, [Your Signature] [Your Name]
Sample 3: Failure to Maintain Insurance
[Landlord Name] [Address] [Phone] [Email] [Date] [Tenant Name / Business Entity] [Premises Address] RE: NOTICE OF DEFAULT – FAILURE TO MAINTAIN INSURANCE Dear [Tenant Name]: You are in default of your insurance obligations under the Lease dated [Date]. LEASE REQUIREMENT: Section [X] of the Lease requires Tenant to maintain: • Commercial general liability insurance with minimum limits of $[Amount] per occurrence and $[Amount] aggregate • Property insurance covering Tenant's personal property and improvements • Landlord must be named as additional insured • Certificates of insurance must be provided annually FAILURE TO COMPLY: Your insurance certificate expired on [Date]. Despite my requests on [Date] and [Date], you have not provided a current certificate of insurance. I contacted your insurance agent on [Date] and learned that your policy was cancelled on [Date] for nonpayment of premiums. You have been operating without required insurance coverage for [X] days, exposing me to significant liability risk. DEMAND: You must obtain and provide proof of required insurance coverage within 5 days of this notice. Insurance certificates must be sent to: [Your Name] [Address] Email: [Email] Alternatively, if you fail to obtain insurance within 5 days, I will obtain insurance coverage on your behalf and charge you the full cost plus a 15% administrative fee, as permitted by Lease § [X]. CONSEQUENCES: Failure to provide proof of insurance within 5 days will result in: • Lease termination and eviction proceedings • Landlord obtaining insurance at Tenant's expense (estimated cost: $[Amount] annually) • Lawsuit for breach of lease seeking damages and attorney fees Provide proof of insurance immediately. Sincerely, [Your Signature] [Your Name]
Remedies & Lease Termination
Landlord's Remedies Under California Law
Civil Code § 1951.2: Allows landlord to terminate lease and recover damages, including unpaid rent and future rent (discounted to present value) minus amounts landlord can reasonably obtain by re-letting.

Damages Recoverable:

  • Unpaid Rent: All rent accrued through date of termination
  • Future Rent: Rent for remainder of lease term, discounted to present value (per § 1951.2(a)(3))
  • Less Mitigation: Minus amounts landlord reasonably could obtain by re-letting (duty to mitigate)
  • Re-Letting Costs: Brokerage commissions, tenant improvement costs, marketing expenses
  • Attorney Fees: If lease provides, prevailing party recovers fees
Civil Code § 1951.4: Continue Lease & Sue for Rent

Alternative remedy: landlord does not terminate lease but sues for rent as it becomes due:

  • Lease remains in effect
  • Tenant remains obligated to pay rent each month
  • Landlord can sue for each month's unpaid rent
  • Advantage: if tenant's financial situation improves, landlord continues receiving full rent
  • Disadvantage: landlord cannot re-let to new tenant; property may sit vacant
Unlawful Detainer (Eviction)

Process for commercial evictions:

  • Step 1: Serve 3-Day Notice to Pay Rent or Quit (for rent defaults) or 3-Day Notice to Perform Covenant or Quit (for lease violations)
  • Step 2: Wait for 3-day period to expire (excluding weekends and holidays)
  • Step 3: File unlawful detainer complaint in superior court
  • Step 4: Serve tenant with summons and complaint
  • Step 5: Tenant has 5 days to file answer
  • Step 6: Trial (typically 20-40 days after filing)
  • Step 7: If landlord wins, obtain writ of possession; sheriff evicts tenant

Timeline: Uncontested commercial eviction typically takes 30-45 days from serving 3-Day Notice to sheriff lockout. Contested cases may take 60-90 days.

Mitigation of Damages
⚠️ Duty to Mitigate: California law requires landlords to make reasonable efforts to re-let premises after tenant default. Landlord cannot simply let property sit vacant and sue tenant for full rent through end of 5-year lease. Must market property, show to prospective tenants, and accept reasonable offers.

Reasonable Mitigation Efforts:

  • List property with commercial broker
  • Advertise on commercial real estate platforms (LoopNet, Crexi, CoStar)
  • Install "For Lease" sign
  • Show property to interested tenants
  • Accept reasonable lease offers (cannot hold out for unrealistic rent)

Tenant's Burden: If landlord sues for future rent damages, tenant can reduce damages by proving landlord failed to mitigate. Tenant must show: (1) landlord did not make reasonable efforts to re-let, and (2) reasonable efforts would have resulted in new tenant.

Personal Guarantees

Many commercial leases include personal guarantees from tenant's principals:

  • Guarantor is personally liable for tenant's lease obligations
  • Landlord can sue both tenant entity and guarantor individually
  • Guarantor liability survives tenant's bankruptcy (unless guarantor also files bankruptcy)
  • Judgment against guarantor can be enforced through wage garnishment, bank levies, real property liens
Security Deposit & Letter of Credit

Commercial leases often require substantial security deposits or letters of credit:

  • Security Deposit: Landlord can apply to unpaid rent, damages, and costs of re-letting
  • Letter of Credit: Landlord can draw on LOC upon tenant default (bank pays landlord immediately; tenant must reimburse bank)
  • No 21-Day Rule: Commercial deposits are not subject to residential 21-day itemization requirement; landlord can hold and apply deposit per lease terms
Bankruptcy Complications

If tenant files bankruptcy:

  • Automatic Stay: All collection and eviction efforts must stop immediately
  • Assume or Reject: Tenant (or bankruptcy trustee) has 60 days to assume lease (cure all defaults) or reject (terminate lease)
  • Post-Petition Rent: If tenant remains in possession during bankruptcy, must pay rent as administrative expense
  • Relief from Stay: Landlord can request bankruptcy court lift stay to proceed with eviction if tenant is not paying post-petition rent
  • Rejection Damages: If lease is rejected, landlord has claim for pre-petition unpaid rent and future rent (capped at one year's rent plus additional amounts per bankruptcy code)
⚠️ Bankruptcy Requires Specialized Attorney: Commercial lease bankruptcies are complex. Consult a bankruptcy attorney immediately if tenant files Chapter 7 or 11.
Attorney Services for Commercial Landlords
Commercial Tenant in Default?

I represent commercial landlords in lease enforcement, evictions, and breach of contract litigation. I handle everything from demand letters to trial, maximizing your recovery and getting your property back quickly.

How I Can Help
  • Default Notice Drafting: I prepare legally compliant default notices that comply with both lease requirements and California statutory law
  • 3-Day Notice Preparation: I draft and serve 3-Day Notices to Pay Rent or Quit and 3-Day Notices to Perform Covenant or Quit
  • Unlawful Detainer (Eviction): I file and litigate commercial evictions, obtaining judgments and writs of possession
  • Breach of Contract Lawsuits: I sue defaulting tenants for unpaid rent, future rent damages, and re-letting costs
  • Guarantor Enforcement: I pursue personal guarantors, obtaining judgments and enforcing through wage/bank levies and property liens
  • Lease Termination & Re-Letting: I advise on termination procedures and guide mitigation efforts to minimize damages
  • Settlement Negotiations: I negotiate early lease terminations, cash-for-keys agreements, and stipulated judgments
  • Bankruptcy Response: I coordinate with bankruptcy counsel to protect your interests in tenant bankruptcy proceedings
Common Cases I Handle
  • Tenant stopped paying rent and ignoring demand letters
  • Tenant is chronically late with rent and owes substantial back rent and late fees
  • Tenant violated use clause (operating unauthorized business)
  • Tenant assigned or subleased without consent
  • Tenant abandoned premises mid-lease and owes years of future rent
  • Tenant filed bankruptcy and you need to protect your interests
  • Tenant disputes CAM charges or refuses to pay property taxes/insurance
  • You need to recover possession quickly and minimize vacancy period
Lease Enforcement Strategy

I develop strategies tailored to your situation:

  • Maximize Recovery: Calculate full damages (unpaid rent + future rent + costs); pursue both tenant and guarantors
  • Fast Eviction: Use unlawful detainer process to regain possession in 30-45 days
  • Mitigation Management: Coordinate re-letting efforts to comply with mitigation duty while preserving claims against tenant
  • Settlement Evaluation: Analyze whether early settlement (cash-for-keys, reduced payment) is better than years of litigation
Why Commercial Lease Litigation Requires Specialized Attorney
High Stakes, Complex Law: Commercial leases often involve multi-year terms and hundreds of thousands of dollars in potential damages. Lease agreements contain sophisticated provisions that require careful interpretation. California's commercial eviction and damages laws are complex. Mistakes in notice, procedure, or mitigation can cost you significant recovery. Hire experienced counsel early.
When to Consult an Attorney

Contact an attorney if:

  • Tenant is more than 10 days late with rent and not responding to informal demands
  • Tenant violated material lease provisions (use, assignment, insurance)
  • You want to terminate lease and need guidance on proper procedures
  • Tenant is disputing your default notice or claiming you breached lease
  • Tenant abandoned premises and you need to secure property and re-let
  • Tenant filed bankruptcy
  • You are considering eviction and want to ensure compliance with statutory requirements
  • Tenant owes substantial past rent and you want to sue for full damages
Schedule a Call

Book a call to discuss your commercial tenant default. I'll review your lease, assess your rights and remedies, and provide a strategy for enforcement and recovery.

Contact Information

Email: owner@terms.law

Frequently Asked Questions
No. Civil Code § 789.3 prohibits self-help evictions for both residential and commercial tenants. You must follow the unlawful detainer (eviction) process: serve 3-Day Notice, file lawsuit, obtain judgment, and have sheriff execute eviction. Illegal lockout results in statutory damages, actual damages, and attorney fees.
Uncontested commercial evictions typically take 30-45 days from serving 3-Day Notice to sheriff lockout. Contested cases (tenant files answer and defenses) take 60-90 days. Complex cases with counterclaims, discovery, or multiple parties can take 4-6 months or longer. Timeline varies by county and court backlog.
Yes. Civil Code § 1951.2 allows landlords to terminate lease and sue for: (1) unpaid rent through termination date, (2) present value of future rent for remainder of lease term, (3) minus amounts you reasonably could obtain by re-letting. However, you have duty to mitigate (make reasonable efforts to re-let). If you successfully re-let at comparable rent, your future rent damages will be minimal.
Follow the lease requirement if it's longer than the statutory minimum. If your lease says "Tenant has 30 days to cure nonpayment of rent," you must give 30 days before terminating (even though CCP § 1161 allows 3-Day Notice). Lease terms that are more favorable to tenant than statute are enforceable. You cannot reduce statutory notice periods, but tenant can negotiate longer cure periods in the lease.
Yes. If the lease includes a personal guaranty, guarantor is personally liable for all tenant obligations. You can obtain a judgment against both the tenant entity and the guarantor individually. If tenant entity has no assets (judgment-proof), you can enforce judgment against guarantor through wage garnishment, bank levies, and liens on guarantor's real property. Guarantor liability survives tenant's bankruptcy (unless guarantor also files).
Automatic stay goes into effect immediately upon bankruptcy filing, and you must stop all collection and eviction efforts. You cannot proceed with unlawful detainer without bankruptcy court permission. Tenant (or trustee) has 60 days to assume lease (cure all defaults and continue) or reject lease (terminate and return property). If tenant is not paying post-petition rent, you can file motion for relief from stay to proceed with eviction. Consult bankruptcy attorney immediately.

Commercial Lease Default — What California Landlords Need to Know

A commercial lease default occurs when a business tenant fails to meet their obligations under the lease agreement. Unlike residential tenancies, commercial leases in California are governed primarily by contract law rather than tenant protection statutes. This means the lease terms you negotiated are largely enforceable as written. Common defaults include nonpayment of rent, failure to pay CAM charges (common area maintenance), property taxes, or insurance premiums, unauthorized use of premises, assignment or sublease without consent, and failure to maintain required insurance coverage.

Common Commercial Tenant Default Scenarios

California Landlord Rights Upon Default

California Civil Code sections 1951.2 and 1951.4 provide commercial landlords with significant remedies upon tenant default. You can terminate the lease and sue for damages (including future rent discounted to present value), continue the lease in effect and sue for rent as it becomes due, or re-enter the premises and re-let to a new tenant while holding the defaulting tenant liable for any deficiency. For nonpayment defaults, you must serve a 3-Day Notice to Pay Rent or Quit before filing an unlawful detainer (eviction) action. For other lease violations, a 3-Day Notice to Perform Covenant or Quit is required unless the violation is incurable.

What California Commercial Landlords Can Recover

Proper Notice and Termination Procedures

Before terminating a commercial lease, you must follow both statutory requirements and any additional procedures specified in your lease. Many leases require 10-30 day cure periods for non-rent defaults, specific notice addresses, and certified mail delivery. Failure to follow these procedures can void your termination and delay eviction. California prohibits self-help evictions for commercial properties under Civil Code § 789.3—you cannot change locks, shut off utilities, or remove tenant's property without a court order. Uncontested commercial evictions typically take 30-45 days from serving the 3-Day Notice to sheriff lockout.