Boston LLC v. Juarez

Boston rented an apartment to defendant under the Los Angeles Rent Stabilization Ordinance (LARSO), L.A. Mun. Code, 151.00 et seq., where the rental agreement contained a forfeiture clause and an insurance clause. After 15 years of defendant failing to obtain insurance, Boston gave defendant a three-day notice to perform or quit. Defendant obtained insurance shortly after the three-day period expired. Boston then sued defendant for unlawful detainer. The trial court ruled in favor of Boston and defendant appealed. The court asserted jurisdiction over the matter under California Rules of Court, rule 8.1002, to settle an important question of law: Whether a tenant’s breach of an LARSO rental contract, regardless of the breach’s materiality or impact on the landlord, justifies the landlord forfeiting the agreement and terminating tenancy. The court held that a tenant’s breach must be material to justify forfeiture. In this case, the tenant’s obligation to obtain and pay for insurance protected the tenant’s interest, not the landlord’s; accordingly, the tenant’s failure to obtain a policy could not have harmed the landlord and therefore was not a material breach of the agreement constituting grounds for forfeiture. Accordingly, the court reversed the judgment and awarded costs to defendant. View "Boston LLC v. Juarez" on Justia Law