Constructive Eviction in Commercial Leases

California law provides tenants with a right of quiet enjoyment of the property they are renting. This right requires a landlord to ensure that tenants’ use and enjoyment of the property will not be disturbed. The right to quiet enjoyment is heavily protected in residential lease agreements and cannot be waived.  However, the right to quiet enjoyment may be waived in commercial lease agreements, and therefore  showing constructive eviction in commercial leases is often more difficult.

It is understandable why the right of quiet enjoyment is more protected for residential tenants than commercial tenants. Obviously, residential tenants are inhabiting the rented space, whereas commercial tenants are merely using rented space for business purposes. If a residential tenant’s right to quiet enjoyment is interfered with, the tenant has the option to either stay in the rented space and sue for damages or vacate the premises and claim constructive eviction. Constructive eviction is essentially a claim that the tenant could no longer live in the property because of the interferences with use and enjoyment of the property, justifying abandonment of the space.

However, showing constructive eviction commercial leases can be more difficult.  In 1994, the appellate court in Lee v. Placer Title Company held that a lease provision prohibited a commercials tenant’s claim for constructive eviction, restricting his rights to a claim for damages or injunctive relief.  In that case, the tenant claimed that cleaning fumes from a neighboring laundromat made his rental space unusable, and on that basis the tenant stopped paying rent and vacated the premises on the claim that there had been a constructive eviction. The commercial landlord sued the tenant for the balance of the rent owed on the lease as damages, arguing that the lease agreement contained a provision prohibiting constructive eviction. The court agreed with the commercial landlord, and held that the covenant of quiet enjoyment was  waived by the tenant. Lee v. Placer Title Company, 28 Cal.App.4th 503 (1994).