Can a Landlord Evict a Tenant from an Illegal Unit in California?

This article addresses evictions from illegal units in California.  Specifically, if a landlord tries to evict a tenant from a unit with no certificate of occupancy (i.e., an “illegal” unit) must the tenant always move out?  

The answer is “yes”, assuming the landlord follows proper procedure required by California’s eviction statutes.  Under California law, the landlord should be awarded possession of the premises, but the tenant will not be forced to pay a judgment for outstanding rent. Depending on the specific facts and circumstances of the case, the landlord may be required to pay relocation fees to the ousted tenant.  The landlord may also be exposed to a separate lawsuit for fraud if the landlord misrepresented or failed to disclose that the unit was unpermitted at the inception of the tenancy.

A Rental Contract Involving an Illegal Unit is Voidable at the Option of the Tenant

Generally, contracts for an illegal purpose are unlawful and unenforceable, including a lease agreement for an unpermitted unit.  In the context of a rental contract, the agreement is voidable at the option of the tenant, meaning tenants can enforce the contract and sue their landlord for resulting damages.  While tenants can enforce the contract, landlords cannot.  Specifically, a landlord is not entitled to collect or request rent from the tenant in an unpermitted unit.  

Can I Evict a Tenant from an Illegal Unit?

Although landlords cannot legally collect rent for an illegal unit, tenants who refuse to pay rent but remain living in the unit are still subject to eviction.  This was the holding of a 1978 appellate court decision that remains good law.  In Gruzen vs. Henry (1978) 84 Cal. App. 3^rd 515 the court addressed and decided the question in the context of a landlord not possessing a certificate of occupancy required by the city and the illegal collection of rent.

In Gruzen, the court of appeal reversed the money judgment entered in the underlying unlawful detainer action, but affirmed the judgment for possession.  In short, the appellate court held the landlord’s failure to secure the certificate of occupancy required by the city ordinance before entering into a rental agreement provided a defense for the tenants in the unlawful detainer action brought by the landlord for unpaid rent. However, the landlord was entitled to an order returning possession of the subject property back to the landlord. 

If the owner is cited by a government agency for having an illegal unit, the tenant may also be evicted on the grounds that substantial repairs to the unit to bring it up to code or to demolish must be performed, which are both just-cause reasons for eviction in most California cities and counties.  However, the tenant would typically be entitled to an award of relocation expense if the eviction was premised on this ground. 

What are the Adverse Consequences of Renting an Illegal Unit?

Landlords who choose to collect rental income generated by an illegal unit can be exposed to a separate civil lawsuit for damages filed by the tenant.  A tenant may have claims against their landlord, such as fraud and misrepresentation, if the landlord represented to the tenant that the unit was legal.  Some of the damages a tenant may seek to recover in a lawsuit against their landlord include rent that was previously paid to the landlord, out-of-pocket expenses, property damage, payment for emotional suffering, damages for physical harm, treble damages, punitive damages, and future damages. Also, the prevailing party to such a lawsuit may be entitled to an award of attorney fees. If, however, the tenant knew the unit was illegal, such knowledge provides a partial or complete defense to the action.

Please contact Lynx Legal with any questions regarding the above, and for all of your eviction needs.  We can be reached at 888-441-2355 or info@lynxlegal.com.  Our experienced professionals are standing by to take your order or answer any questions you may have.