Owner Wrongfully Evicted Beauty Salon Tenant

A lease required the tenant to use its space only as a beauty salon, and to comply with all laws. One of the tenant's employees and the guarantor's brother told the owner that “something illegal” was going on in the tenant's space. The owner never verified this allegation. Instead, worried that it would be sued or arrested, it sent the tenant a default notice telling the tenant it had three days to cure the default. But before the three-day cure period expired, the owner leased the space to a new tenant and gave it keys. So the tenant sued the owner, arguing that the owner had wrongfully evicted it.

A California appeals court ruled that the owner had wrongfully evicted the tenant. The court said that the owner had acted in good faith when it sent the tenant the default notice. But, the court said, the owner's failure to wait for the three-day cure period to expire before signing a lease with a new tenant and giving it keys to the space denied the current tenant the use and quiet enjoyment of the space it was entitled to under the lease, and thus violated the lease, the court explained [Kaskalavich v. Tseng].