Legal Question in Real Estate Law in California

retro active rent increases

I am a tenant with a simple commercial lease. The lease provides for annual rent increases tied to CPI. Over a 3 year period I have never been informed of a rent increase. My monthly rent checks have been deposited without question or notice that the rent had changed. Now the landlord is trying to collect retroactive increases that he now realizes that he could have had. Is he entitled to these increases now?

Asked on 7/15/01, 12:03 pm

2 Answers from Attorneys

Lloyd Kirschbaum Law Offices of Lloyd Kirschbaum

Re: retro active rent increases

The answer is probably not. This type of lease issue is ordinarily governed by both the language in the lease itself (people can voluntarily agree to just about anything so long as it's not illegal or against public policy) and local ordinances (such as rent control). Most standard leases, and most local jurisdictions usually provide for advanced notice (usually in writing) for any rent increases. If your lease provided for such notice, or the locality where the property is located requires such advanced notice, additional rents will be disallowed in the absence of proper notice. If you refuse to pay the additional retroactive rent, the landlord will have the burden of proving in a lawsuit that the additional rent was actually due. In the absence of an agreement between the two of you, or appropriate notice (both of which appear to be missing here), he will probably have a hard time doing that. But you should also weigh doing what's right (standing up to the landlord and refusing to pay the improper rent increase) against doing what may be less expensive (paying the improper rent rather than incurring the cost of defending a lawsuit trying to throw you out of the property for failure to pay rent). I hope that's helpful.

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Answered on 7/16/01, 2:22 pm
Judith Deming Deming & Associates

Re: retro active rent increases

A standard commercial lease form in common usage, is the American Industrial Real Estate Association lease, and it provides for increases consistent with the CPI. I suspect this is the lease you are using, and it provides that until such time as the CPI is calculated (this is difficualt in some instances in that CPI in a given area may not be readily available), the tenant will pay at the old rate and then the landlord will notify the lessee of the increase, and the lessee must then bring the rental current by paying the accumulated CPI increases; in reviewing some of my old leases, this provision is in the AIREA form at itme 4.3.4; check your lease to see if this is the agreement you signed. If it is, then yes, the landlord can demand all the accumulated increases. Likewise, if you are using some other form which has the same or similar provision, there is no impediment to the landlord seeking the increases. Commercial leases are very different from residential rental agreements and although you may have heard that a landlord must give you a certain number of days notice of increases, etc., in a commercial lease, the rights of parties are dependent upon the written provisions of the lease. Go through yours with a fine tooth comb to ascertain if the landlord can seek these monies now.

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Answered on 7/18/01, 5:14 pm

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