April 2018 Update
Immigrant and Citizenship Status Protection for Tenants. In the past year, comprehensive legislation, Stats 2017, ch 489, added a large matrix of new protections for tenants to both the conventional landlord-tenant laws and the statutes governing evictions. Civil Code §§1940.05, 1940.2, 1940.3, 1940.35, and 1942.5 prohibit threats to disclose (or actual disclosure of) information related to the immigration or citizenship status of a tenant, occupant, or other person known to the landlord to be associated with a tenant or occupant, in order to influence a tenant to vacate a dwelling, to harass or intimidate a tenant or prospective tenant, to retaliate against a tenant for the exercise of his or her rights, or to recover possession of the dwelling, with specified exceptions. Civil Code §§1940.35 and 1942.5 provide financial penalties for violations. The bill also added CCP §1161.4 to preclude eviction of a tenant or occupant because of the immigration or citizenship status of the tenant or occupant, unless the landlord is complying with any legal obligation under any federal government program that provides for rent limitations or rental assistance to a qualified tenant; this section also established an affirmative defense and rebuttable presumptions with respect to the immigration issue. For discussion, see §§2.12, 2.19, 2.60A–2.60C, 6.14–6.15, 8.111–8.111A, 8.145, 8.149, 8.153–8.153A, 10.60B, 11.4A, 12.62A.
Leasing Disclosures, Lease Provisions, and Insurance. The lease or rental agreement should clearly specify the amount and manner of rent payment. If the landlord directs the manner in which the rent is to be delivered and the tenant remits rent in that manner, the landlord bears the risk of loss. Sleep EZ v Mateo (2017) 13 CA5th Supp 1. See §§1.31, 4.33, 8.46.
Effective January 1, 2018, all leases in California must contain a warning if the premises are located in “a special flood hazard area or an area of potential flooding, if the owner has actual knowledge of that fact.” Govt C §8589.45. See §1.40.
Effective June 14, 2017, housing providers must provide a HUD form (Notice of Occupancy Rights under the Violence Against Women Act) and a self-certification form to applicants for (or tenants of) housing assisted under a covered housing program. See §§1.44, 1.47, 2.15A.
On December 22, 2017, the California Tax Credit Allocation Committee (CTCAC) issued a memorandum to all property owners and management agents of Low Income Housing Tax Credit (LIHTC) properties to implement the Violence Against Women Reauthorization Act of 2013 (VAWA). While the IRS has yet to release official guidance, CTCAC began to require, on January 1, 2018, that tax credit properties in California comply with CTCAC's “Violence Against Women Reauthorization Act of 2013 LIHTC Information and Checklist.” See §1.44.
Some landlords are willing to permit small pets such as birds or cats and others are expanding their acceptance of animals because of statutory requirements regarding companion or support animals or the prospect of charging more rent. See newly amended lease clause in §1.61.
Landlords must consider insurance needs from numerous perspectives. Primarily, as owners, landlords must decide what type of insurance coverage to purchase for protecting themselves from various risks, damages, and claims, and whether a requirement in the lease that the tenant purchase insurance is enforceable. See newly amended §4.49B.
Fair Housing. If the grounds for lease termination involve criminal activity or material noncompliance with the lease or state landlord-tenant laws, tenants in HUD-assisted and project-based Section 8 units must be served with a notice according to state law and the rental agreement. This usually means a 3-day notice for tenants in most HUD-assisted programs but a 30-day notice for tenants in Section 202 or Section 811 programs. See Long Beach Brethren Manor, Inc. v Leverett (2015) 239 CA4th Supp 24. See §2.8.
A consensus among federal courts has been reached that both public and private landlords may not discriminate against persons on the basis of their immigration or citizenship status under the Civil Rights Act of 1866 (42 USC §1981) or under related protected categories (i.e., race or national origin) under the Fair Housing Act. See newly added discussion in §2.5D.
Landlords with tenants receiving disability income may need to grant tenants’ requests to alter the due date of rental payment to reasonably accommodate tenants’ commonly late receipt of government benefits. See Fair Hous. Rights Ctr. in Southeastern Pennsylvania v Morgan Props. Mgmt. Co. (ED Penn, Apr. 11, 2017, No.16-4677) 2017 US Dist Lexis 55249). See §2.9D.
Public entities may not prohibit landlords from offering or continuing to offer accommodations for rent or lease, or otherwise take any action regarding or based on the immigration or citizenship status of a tenant, prospective tenant, occupant, or prospective occupant of residential rental property. CC §1940.3; initially effective in 2009, §1940.3 was substantially amended, effective January 1, 2018, to increase protections for tenants. See §§2.19, 2.60A.
Local ordinances and policies that cause disparate impact or deliberately target protected immigrant classes by prohibiting overcrowding in rental housing and by promoting excessive and selective enforcement of building codes against owners that rent to immigrants may be challenged under 11 USC §1983. See Avenue 6E Invs., LLC v City of Yuma (D Ariz 2017) 217 F Supp 3d 1040. See §§2.19, 2.65.
Allowing an emotional-support animal (ESA) may be a reasonable accommodation under fair housing laws. On documentation required to support accommodation requests made by persons with disabilities to their landlords or homeowners associations to allow ESAs or assistance animals to accompany or live with them on the premises, see §2.27B.
In Smith v Avanti (D Colo 2017) 249 F Supp 3d 1194, the court recognized discrimination based on nonconformity with gender stereotypes as actionable under the Fair Housing Act (FHA). See §2.27K.
In addition to prohibiting discrimination and harassment against members of protected classes, the FHA also bars retaliation against persons who aid or encourage housing rights under the Act. Linkletter v Western & S Fin. Group, Inc. (6th Cir. 2017) 851 F3d 632. See §2.27M.
A party’s claim under the FHA survives the death of that party. Revock v Cowpet Bay West Condominium Ass’n (3d Cir 2017) 853 F3d 96. See §2.30.
A federal district court cannot enjoin the enforcement of an unlawful detainer judgment issued by a state court on the basis of the tenant’s assertion that the eviction violated the FHA. Warda v Santee Apts. LP (SD Cal, Apr. 11, 2017, No. 17cv648-WQH-JMA) 2017 US Dist Lexis 55529. See §§2.39, 13.73A.
Procedures for defending evictions arising from discrimination on the basis of a tenant’s immigration or citizenship status are in newly enacted CCP §1161.4, which allows a tenant or occupant to raise, as an affirmative defense in the unlawful detainer action, that the landlord violated §1161.4. It is a rebuttable presumption that a tenant or occupant has established the defense if the landlord commits specified acts. See discussions in §§2.60B, 8.145, 8.149, 8.153, 10.60B, 11.4A, and 12.38, and new jury instruction in §12.62A.
Rights and Obligations Before, During, and After Tenancy. To encourage the conservation of water in multifamily residential rental buildings, the legislature enacted the utility submetering law, operative January 1, 2018, which permits a landlord to use a submeter to charge a tenant separately for water service to an individual dwelling unit and imposes requirements on landlords. Under CC §1954(a)(5), a landlord may enter a dwelling unit for specified purposes relating to a submeter or water fixture if certain requirements are met. See §§3.2, 4.50G.
The tenant may be able to recover punitive damages in an action for breach of the implied warranty of habitability under CC §3294 if the landlord’s conduct was willful, oppressive, or malicious. Fernandes v Singh (2017) 16 CA5th 932. See §§3.40, 5.16, 5.20, 8.115–8.116, 12.38.
Recreational use of marijuana in California was legalized beginning November 9, 2016, by Proposition 64, commonly known as the Adult Use of Marijuana Act. It allows persons who are 21 years of age and older to (1) possess, process, transport, purchase, obtain, or give away (without compensation) up to 28.5 grams of nonconcentrated cannabis and up to 8 grams of concentrated cannabis and (2) possess, plant, cultivate, harvest, dry, or process up to six living plants. See §4.44F. The new law builds on and utilizes many aspects of the comprehensive regulatory structure for commercial medical cannabis. California anticipates a likely rise of marijuana use at residential properties statewide; creating procedures and policies to minimize nuisance allegations and to respond to resident complaints will be important to consider and will be similar to those issues landlords face in response to medical marijuana, discussed in §§4.44B–4.44E.
When a secured lender of the tenant acquires the leasehold estate by foreclosing against that estate, the lender is not liable to the landlord for the payment of rent owing for the remainder of the lease term after the lender relinquishes possession, unless the lender expressly assumed the lease. BRE DDR BR Whittwood CA LLC v Farmers & Merchants Bank (2017) 14 CA5th 992. See §§3.51–3.52.
The Consumer Credit Reporting Agencies Act (CCRAA) and the Investigative Consumer Reporting Agencies Act (ICRAA) govern a landlord’s use of consumer credit or investigative reports as a basis for accepting or rejecting tenants. Because the interplay of these laws is unclear, it is more prudent for landlords to comply with both the CCRAA and the ICRAA when ordering investigative reports on rental applicants. See Cunha v IntelliCheck (ND Cal 2017) 254 F Supp 3d 1124, discussed in §4.9.
While it has been the long-standing practice of most landlords to prohibit all pets in their rental properties, many property owners have started to re-think their antipathy to allowing tenants to have pets. There is also an expanded use of service animals, and other animals that provide companionship, comfort, and support to their owners, among those seeking to rent housing units. It must be remembered that such animals are not considered under the law to be “pets.” See newly added discussion in §4.15B.
In 2017, the Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA) repealed the 2015 Medical Cannabis Regulation and Safety Act (MCRSA) and amended the 2016 Adult Use of Marijuana Act (AUMA). See SB 94 (Stats 2017, ch 27), discussed in §§4.44B–4.44F.
The exception from the attorney-client privilege for situations in which an attorney’s services were sought to enable or aid the client to plan or commit a crime will not apply to legal services that comply with state or local laws on medicinal or adult-use cannabis, and confidential communications provided for the purpose of rendering those services are confidential as between client and attorney, as long as the attorney also advises the client on conflicts with respect to federal law. See Evid C §956(b) (added by Stats 2017, ch 530, effective Jan. 1, 2018), cited in §4.44E.
Property owners are sometimes faced with a disaster that seriously damages their rental property and forces tenants to vacate the rental units. Such events can be caused by events clearly beyond the control of the owner or can arise from deterioration of elements of the building (e.g., a water pipe breaks). On whether the landlord needs to determine whether there is any obligation to provide relocation assistance to the tenants, see newly added §4.50H.
In Ayala v Dawson (2017) 13 CA5th 1319, the tenants were collaterally estopped from bringing a suit for fraud claims when the underlying allegations of fraud were presented in prior unlawful detainer actions, were extensively and fully litigated, and the trial courts had made detailed findings of fact in rejecting the claims. See §§5.23, 8.82, 9.8, 13.39.
Anti-SLAPP Motions. Under CCP §425.16(c), the court must award attorney fees and costs to a prevailing defendant on an anti-SLAPP motion. See 569 E. County Blvd. LLC v Backcountry Against the Dump, Inc. (2017) 6 CA5th 426. See §5.18A.
In Hart v Darwish (review granted Sept. 13, 2017; superseded opinion at 12 CA5th 218), the court of appeal ruled that although a denial of an anti-SLAPP motion in an underlying lawsuit does not bar malicious prosecution liability for the underlying lawsuit, the denial of a motion for nonsuit on the merits in the underlying unlawful detainer action “conclusively establishes” that the prior suit was legally tenable, thus precluding a subsequent action for malicious prosecution; the supreme court will review that decision. See §5.18C.
Mobilehome Park Tenancies. A new protection for mobilehome sellers or transferors, beginning in 2018, is a law providing the opportunity for a seller or transferor to record a notice of transfer and release of liability with the Housing and Community Development Department and not be personally responsible for fees or taxes after the date of recordation of that notice. Health & S C §18107. See §6.12.
The California Public Utilities Commission created in 2014 a 3-year pilot Mobilehome Park Utility Upgrade Program to convert 10 percent of master metered gas and electric services to direct service from local utilities. This program was extended through 2019 by CPUC Resolution E–4878 (Sept. 28, 2017). See §6.13.
Issues related to government funding of both mobilehome parks and mobilehome acquisitions and rehabilitation may become a more common issue in the future, because of initiatives such as Stats 2017, ch 727, which enacted Gov C §65852.35 to require all state and local programs designed to facilitate home ownership or residence to include manufactured housing, to the extent feasible. See §6.17.
In addition to the form required by CC §798.75.5(b), newly enacted Govt C §8589.45 requires for any lease entered into on or after July 1, 2018, a disclosure in the lease related to whether the owner has actual knowledge, as defined by that law, that the park property is in a special flood hazard area or an area of potential flooding, and the lease must provide specified additional information. See §§6.26, 6.154.
Civil Code §798.34 provides for four types of co-residents for homeowners in mobilehome parks with significant changes adopted by Stats 2017, ch 767 (SB 147). See §6.42.
Civil Code §799.9, governing mobilehome subdivisions and resident-owned parks, was amended to enhance antidiscrimination protections for caregivers, See §6.42.
Local Eviction Controls and Constitutional Issues. San Francisco Rent Board Rules and Regulations §12.20, which prohibits evictions for violations of unilateral changes to lease agreements, is not preempted by CC §827, the statute that requires 30 days’ prior notice for unilateral changes to rental agreements. The Rent Board did not exceed its authority in promulgating Rule 12.20, because the Board has the power to promulgate regulations to effectuate the purposes of the rent ordinance. Foster v Britton (2015) 242 CA4th 920. See §§7.25, 7.53, 7.57.
In California Bldg. Indus. Ass’n v City of San Jose (2015) 61 C4th 435, the supreme court held that San Jose’s inclusionary housing ordinance that applied to builders of housing for sale was a valid regulation of land under the city’s broad police power and that the validity of the ordinance did not depend on showing that the restrictions are reasonably related to the impact of a particular development, but need only be reasonably related to the broad general welfare purposes for which the ordinance was enacted. The legislature enacted Govt C §65850(g), effective January 1, 2018, which comports with this decision. See §§7.14, 7.25, 7.25B.
Numerous sections of the San Francisco Residential Rent Stabilization and Arbitration Ordinance were amended in June and July 2017 to require a landlord to calculate Ellis Act relocation benefits based on all lawful occupants in the unit regardless of age and to strengthen protections for tenants in owner move-in evictions. See §7.53.
Tenant buyout agreements, when properly negotiated, reported, and documented, trump eviction control ordinances that otherwise preclude tenant waivers of rights (such as good or just cause for a move out). Geraghty v Shalizi (2017) 8 CA5th 593. See §§7.54, 7.65, 7.67–7.68, 8.113.
A minor child may be a lawful occupant of a rental unit, but is not a tenant to whom relocation assistance must be separately paid. Danger Panda, LLC v Launiu (2017) 10 CA5th 502, 516, interpreting San Francisco Residential Rent Stabilization and Arbitration Ordinance, SF Admin C, chap 37. See §§7.64, 7.64F, 7.64H, 7.76A.
In Coyne v City & County of San Francisco (2017) 9 CA5th 1215, the court ruled that the city’s attempt to have the landlord pay an enhanced tenant relocation assistance payment based on the difference between the tenant’s current rent and the prevailing market-rate rent imposed a prohibitive price on landlords exiting the residential rental business and was preempted by the Ellis Act. See §§7.64, 7.64H.
To discourage owners from falsely removing rent-controlled units from the market and then attempting to return them to the rental market at current market rates, the Ellis Act employs a three-tiered timeline, during which an owner who returns previously withdrawn units to the market suffers a penalty for doing so. See, e.g., City of West Hollywood v Kihagi (2017) 16 CA5th 739, cited in §7.64C.
Terminating Tenancies and Eviction Actions. Procedures for defending evictions arising from discrimination on the basis of a tenant’s immigration or citizenship status are in newly enacted CCP §1161.4, which allows a tenant or occupant to raise, as an affirmative defense in the unlawful detainer action, that the landlord violated §1161.4. It is a rebuttable presumption that a tenant or occupant has established the defense if the landlord commits specified acts. See discussions in §§2.60B, 8.145, 8.149, 8.153, 10.60B, 11.4A, and 12.38, and new jury instruction in §12.62A.
A tenant has the right to a jury trial on the affirmative defense of the implied warranty of habitability. Guttman v Chiazor (2017) 15 CA5th Supp 57. See §§3.32, 11.55, 12.36–12.37, 13.36.
A summary remedy to eject squatters (CCP §§527.11–527.12) expired on January 1, 2018; it applied only to residences of up to four units in the cities of Palmdale and Lancaster in Los Angeles County and the City of Ukiah in Mendocino County. See §§8.7A, 9.10.
In Scott v Kaiuum (2017) 8 CA5th Supp 1, with respect to a tenant renting a residential unit with Section 8 program assistance, a demand to pay rent or quit was found to be excessive and invalid because it (1) demanded rent that was not owing because of uncorrected habitability violations and (2) specified the full market rent rather than the lesser amount of rent the tenant actually paid, which then was subsidized by the local housing authority through the Section 8 program. See §§8.46, 10.56.
When the eviction action is based on two different reasons that each require a different notice, the complaint must allege and the landlord must prove facts sufficient to show that a judgment for possession is warranted on at least one of those reasons . See The CBM Group, Inc. v Llamas (2017) 12 CA5th Supp 34. See §§8.58, 8.63, 8.68, 9.37.
Under state law, a landlord may terminate a tenancy if the tenant maintains, commits, or permits a nuisance on the premises. In public housing, repeated violations of nonsmoking lease provisions may suffice without it impacting others under 24 CFR §966.4(f)(12)(i)(B). See §8.70.
In an eviction action following foreclosure, a court of appeal held that the purchaser at a foreclosure sale need not await recordation of the trustee’s deed before serving the notice to quit on a tenant whose lease was extinguished by the foreclosure. The court held, however, that the deed should be recorded before the unlawful detainer action is filed. See Dr. Leevil, LLC v Westlake Health Care Ctr. (review granted June 14, 2017; superseded opinion at 9 CA5th 450). See §§8.81, 9.37, 10.46, 14.21.
In proceedings or discovery undertaken in forcible entry and forcible detainer actions, or in any civil action involving a tenant’s housing rights, the “immigration or citizenship status” of any person “is irrelevant to any issue of liability or remedy.” CC §3339.10(a). Thus, no inquiry is permitted into a person’s immigration or citizenship status, unless the tenant’s asserted claims or defenses place the person’s immigration or citizenship status directly in dispute or the person seeking to make such inquiry demonstrates by clear and convincing evidence that it is necessary to comply with federal immigration law. CC §3339.10(b)(1). See §§8.145, 8.149, 8.153, 11.4A.
Effective January 1, 2018, the legislature added CCP §415.20(c), which provides that if the only address reasonably known for the person to be served is a private mailbox in a commercial mail receiving agency, service may be effected on the first delivery attempt by leaving a copy of the summons and complaint with the mail receiving agency in the manner specified. This amendment will have limited effect in most unlawful detainer actions because the leased premises is a known address. See §§9.48, 10.10.
The California Supreme Court held that when the trial court denies a request for a jury trial in a civil action, the decision is immediately reviewable before trial by way of a petition for an extraordinary writ, and that the party requesting the jury need not wait until after a bench trial to appeal the issue. Shaw v Superior Court (2017) 2 C5th 983. See §11.53.
An unlawful detainer judgment does not preclude the landlord from filing a separate civil action for collection of back-due rent that accrued in months other than the one month for which damages were awarded in the unlawful detainer action. Hong Sang Market, Inc. v Peng (2018) 2018 Cal App Lexis 117. See §§11.62, 13.39.
The trial court’s denial of a tenant’s motion for nonsuit on the merits under CCP §631.8 in an unlawful detainer action “conclusively establishes” that the action was legally tenable, even if the tenant ultimately prevailed at trial, thus precluding a subsequent action for malicious prosecution by the tenant. Hart v Darwish (review granted Sept. 13, 2017; superseded opinion at 12 CA5th 218). See §12.35.
A court must vacate a default or default judgment on grounds of attorney mistake, inadvertence, surprise, or neglect whenever an application for relief is made no more than 6 months after entry of judgment and is accompanied by the attorney’s sworn affidavit, unless the court finds that the default was not in fact caused by the attorney. See Gee v Greyhound Lines, Inc. (2016) 6 CA5th 477 (mandatory relief properly granted to set aside dismissal after counsel failed to pay fees for change of venue). See §13.8.
When a contractual attorney fee provision by its language is limited to actions “brought to enforce” the contract, the successful assertion of the contract as an affirmative defense does not constitute an “action” entitling the defendant to attorney fees. Mountain Air Enters., LLC v Sundowner Towers, LLC (2017) 3 C5th 744. See §13.26.
A voluntary dismissal does not always exculpate a plaintiff from liability for attorney fees. Khan v Shim (2016) 7 CA5th 49 (CC §1717 did not preclude fee award on tort claims that were voluntarily dismissed). See §13.27.
In Lafitte v Robert Half Int'l, Inc. (2016) 1 C5th 480, the supreme court found that a trial court did not abuse its discretion in using a percentage method for its primary calculation of an attorney fee award in a common fund case. Further, the court found that cross-checking the reasonableness of a percentage fee award through a lodestar calculation was within the trial court’s discretion. See §13.29.
Like a directed verdict, a judgment notwithstanding the verdict is proper only when the court determines that there is insufficient evidence to support a verdict for the nonmoving party, after viewing the evidence in the light most favorable to that party and disregarding conflicting evidence. See the supreme court’s decision in Webb v Special Elec. Co. (2016) 63 C4th 167 (reversing trial court’s grant of judgment notwithstanding verdict when substantial evidence supported jury verdict). See §13.45.
Tenant Bankruptcies and Stay Relief to Complete Eviction. Bankruptcy law limits the availability of the automatic stay to individual or joint debtors who are repeat bankruptcy filers and whose previous bankruptcy cases were recently dismissed. See, e.g., In re Keeler (Bankr ND Ga 2016) 561 BR 804 (stay terminates as to debtor and property of estate only to allow landlord to regain possession of leased premises but not to collect past due rent). See §14.4A.
For stay violations that occur in the context of real property foreclosures and resulting evictions, the consequences can be severe. See, e.g., Sundquist v Bank of America (In re Sundquist) (Bankr ED Cal 2017) 566 BR 563 (bank liable for actual and punitive damages for willfully violating stay by, among other things, foreclosing on home and prosecuting unlawful detainer action after borrowers filed bankruptcy petition, forcing them to move, secretly rescinding foreclosure, failing to secure home from looting, and refusing to pay for personal property loss). See §14.6.
While not directly ruling on whether CCP §715.050 was preempted by the Bankruptcy Code, the Ninth Circuit held that a debtor (the former property owner) had no legal or equitable interest in the real property after issuance of the state court’s unlawful detainer judgment and writ of possession following a foreclosure; thus, the automatic stay created by the debtor’s subsequent bankruptcy was not violated by the eviction. Eden Place, LLC v Perl (In re Perl) (9th Cir 2016) 811 F3d 1120. See §§14.9, 14.16–14.19, 14.21.
Residential tenants filing bankruptcy must disclose in their petitions if a judgment for possession of their residence has been entered. Filing a certification with the petition that circumstances exist under which he or she would be permitted to cure, under applicable nonbankruptcy law, the entire monetary default that gave rise to the judgment for possession allows the tenant to retain the protection of the automatic stay for 30 days after the petition is filed, with specified exceptions. For a newly adopted certification form, see Initial Statement About an Eviction Judgment Against You (Official Bankruptcy Form 101A), discussed and reprinted in §§14.16, 14.70A.
In the federal courts in the Central District of California, under CD Cal Local Bankr R 4001–1(c)(1)(A), if a stay relief motion seeks an order allowing the moving party to proceed with an unlawful detainer action involving a residential property with a month-to-month tenancy, a tenancy at will, or a tenancy terminated by an unlawful detainer judgment, the moving party need serve only the debtor and debtor’s counsel (if any). See §14.25.
Some debtors try to avoid the dismissal of the bankruptcy on the creditor’s or the court’s motion by attempting to voluntarily dismiss the case before the hearing on the motion. This is not allowed in the Ninth Circuit if the debtor had filed the bankruptcy in bad faith, but other courts recognize a debtor’s absolute right to voluntarily dismiss its case, and some of them also recognize their authority to sanction the debtor when dismissing the case. See In re Ross (3d Cir 2017) 858 F3d 779, cited with other similar cases in §14.32.
The reciprocal right to attorney fees under CC §1717 presents risk to creditors in bankruptcy litigation, since a losing debtor may not have the resources to pay fees, but may be allowed to recover fees against a losing creditor that is solvent. See, e.g., Cardenas v Shannon (In re Shannon) (BAP 9th Cir 2016) 553 BR 380 (debtors’ right to attorney fees for defeating nondischargeability action depends on whether litigation involved state law issues rather than federal nondischargeability issues). But if the issues in the nondischargeability action do not involve enforcing a contractual right, fees are not recoverable. See Bos v Board of Trustees (9th Cir 2016) 818 F3d 486. See §14.51.
When the landlord is the debtor in bankruptcy, some courts have held that a sale free and clear of the landlord’s property does not divest the subordinate tenant of possessory rights, even though state foreclosure law would have. But in 2017, the Ninth Circuit reached a different result in Pinnacle Restaurant at Big Sky LLC v CH SP Acquisitions, LLC (In re Spanish Peaks Holdings II, LLC) (9th Cir 2017) 872 F3d 892 (trustee for debtor landlord conducted sale of debtor’s real property “free and clear” of liens and encumbrances, without rejecting lease). See §14.54A.