OK to Evict Tenant for Growing Marijuana Without a Permit

What Happened: What happens when a tenant signs a five-year lease on a warehouse for use as an indoor cannabis cultivation facility but can’t get the necessary permits because the property doesn’t have an adequate fire sprinkler system? The tenant figured the landlord would install the system; the landlord thought it was up to the tenant to install the system. And when the tenant continued the grow operation without meeting this responsibility, the landlord brought an eviction suit. The trial court sided with the tenant.

Ruling: The California appeals court reversed the lower court ruling.  

Reasoning: The lower court misread the lease, said the appeals court, specifically, the following provision:  

Lessor . . . warrants that the existing electrical, plumbing, fire sprinkler, lighting, HVAC, loading doors, sump pumps, if any, and all other such elements in the Unit, other than those constructed by Lessee, shall be in good operating condition [emphasis added]

Under the provision, the landlord’s duty was only to provide a sprinkler system if it was “existing” at the time of execution; the clause also specifically contemplated the possibility that not all of the listed elements (e.g., sprinkler, loading doors, sump pumps, etc.) would be in place because it followed the list with “if any.” Nor did the lease include any language expressly requiring the landlord to install a fire sprinkling system.

• Kwuan v. Norcal Research Dev., 2022 Cal. App. Unpub. LEXIS 1875