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Lease dispute headed to arbitration after appeals court ruling

| Aug 11, 2017 | Landlord/Tenant Matters |

The 2nd District Court of Appeal in California has given a tenant a chance to arbitrate a dispute with a landlord in Los Angeles. This ruling reversed the decision of a lower court that had deemed the arbitration clause to be expired after 30 days from the notice that the landlord sent the tenant to quit the property.

The current landlord, DC Universal LLC, had bought the property in 2003, and the appeals court decided that the company had assumed the terms of the existing lease with the tenant, Appellant Universal Bank. A dispute that emerged between the parties after the purchase had been resolved with a third lease addendum that allowed the lease to continue until 2010 plus another five years of occupancy.

In 2015, however, the parties failed to reach an agreement regarding the rent. The landlord then filed a court action to reclaim the property. The tenant responded by summoning the arbitration clause included within the third lease addendum. At the time, the trial court rejected the request for arbitration on the basis of the lease’s expiration. On appeal, the court found that the arbitration agreement continued after the term of the lease.

When a person has a dispute concerning the terms of a lease, a real estate attorney could provide guidance. An attorney could interpret the terms of the lease and advise the landlord about tactics for resolving the problem with a tenant. He or she could also inform a landlord about the legal rights of the tenant and suggest approaches, such as arbitration or court action, that could achieve a workable compromise or defend the landlord’s interests.

Source: Northern California Record, “California Second District Court of Appeal reverses lower court’s decision in dispute between landlord and tenant“, Angela Underwood , July 19, 2017