When a month-to-month tenant stops paying rent and a landlord initiates an unlawful detainer lawsuit, does the tenant maintain tenancy rights in the premises pending the resolution of the lawsuit? The answer to this question (“no”) was unsettled until the Court of Appeal’s recent decision in Multani v. Knight.

Multani involved a lawsuit by a former tenant (Multani) against her former landlord (Knight) for breach of the covenant of quiet enjoyment, private nuisance and other causes of action arising from a sewage leak that damaged the premises (including equipment in the premises) that Multani leased from Knight. Prior to Multani’s lawsuit, Knight filed a lawsuit for unlawful detainer against Multani for failure to comply with a 3-day notice to pay rent or quit. At the time Knight served the 3-day notice to pay or quit, Multani was occupying the premises pursuant to a month-to-month tenancy. Knight ultimately prevailed in the UD.   

In defending Multani’s affirmative claims, Knight argued that at the time of the sewage leak (which was after Knight initiated the UD), Multani had no legal right of possession, and therefore could not prevail on her claims, which were dependent on legal possession of the premises. The Court of Appeal held:

[T]he implied month-to-month lease terminated when [Multani] failed to pay rent.  Further, even if [Multani’s]  failure to pay rent, in itself, did not terminate the statutorily-implied lease, it nevertheless constituted a material breach of the lease…Here, Knight’s service of a three-day notice to pay rent or quit and her initiation of an unlawful detainer action when [Multani] failed to comply with the notice indisputably establishes Knight’s election to terminate the implied lease. Thus, even if [Multani’s] initial failure to pay rent did not terminate her month-to-month tenancy, her failure to comply with the three-day notice to pay rent or quit, followed by Knight’s filing of an unlawful detainer action, terminated the implied lease and [Multani’s] legal right to possession of the premises.

The implied covenant of quiet enjoyment arises from a lease. And a claim for private nuisance can only be maintained by one whose property rights have been invaded. Because the service of the three-day notice to pay rent or quit and initiation of the UD terminated Multani’s tenancy rights, including her right to possess the premises, the Court found Multani could not prevail on her claims.   

Multani holds that a month-to-month tenant who fails to pay rent no longer has tenancy rights once an UD action for non-payment of rent is initiated. However, the case leaves open the question of whether the tenancy right terminates earlier, i.e., before the UD action is filed, but after the tenant stops paying rent.