Businesses are closed due to government mandate. In the San Francisco Bay area, other than in San Mateo county until it ended up on California’s county watch list, businesses like movie theaters, gyms, and salons have not been able to operate at all. What business can sustain four months to a year of no income?

Other than salary, the next largest operating expense for businesses is often rent. 

These are the evaluations that businesses and landlords are making moving forward:

1. How will backrent be addressed?
2. Can the business continue in a post-Covid world and remain in the leased premises?
3. What are the consequences for terminating the Lease?

 By: Julia M. Wei and Josue Uribe Fonseca

In a purchase and sale context, California law requires the seller of residential real estate to disclose material facts affecting the value or desirability of the property, “if it is known that such facts are not known to or within the reach of the diligent attention and observation of a buyer.” Calemine v. Samuelson, 171 Cal. App. 4th 153, 161-62 (2009). A fact is material if it has an effect on the value or desirability of the property. Alfaro v. Cmty. Hous. Improvement Sys. & Planning Ass'n, Inc., 171 Cal. App. 4th 1356, 1382 (2009).

However, as a residential landlord, the disclosure requirements to tenants are less broad and largely controlled by state law with mandated disclosures such as the Mold Addendum and the Bedbug Addendum.

There is very little law on point for landlord’s duties to disclose in a residential leasing context. This is likely due to the fact that the California Civil Code provides numerous protections for the residential tenant, such as their right to repair and deduct.

In California, real estate often has multiple owners due to investment structure or inheritance of family property.

Co-owners of California real estate can hold title to the property as joint tenants or as tenant-in-common.  These two types of ownership have different legal ramifications and tax treatment.  However, under the law, each co-owner has equal rights to the property regardless of co-ownership percentage.