What are the consequences of serving a three-day Notice to Pay Rent or Quit?
• Service of the three-day Notice to Pay Rent or Quit can limit the landlord’s rights. Under California law, if the lease so provides, and if the lease permits the tenant to assign or sublet, a landlord has the right to keep a lease in effect if the tenant fails to pay rent, regardless of whether the tenant also abandons the premises. (Civil Code section 1951.4.) If the landlord invokes this right, the tenant retains the legal right to possession, the landlord has no duty to mitigate damages, and the landlord can sue the tenant for all rent due up to the time of trial. This strategy may be particularly useful if a tenant is solvent and the landlord desires to place the burden of mitigation (by assignment or subletting) on the tenant. This option can be particularly beneficial in the current economic climate if the tenant is an otherwise creditworthy company that has simply elected to close an office, retail or warehouse location that is not part of its current business plan. By contras
