California Court of Appeal Holds Three-Day Notice to Pay Rent or Quit Cannot Demand Rent More Than One Year Old

In Universal Shopping Plaza v. Hong (Sept. 9, 2026) 2026 WL 2654618, the California Court of Appeal reversed an unlawful detainer judgment in favor of a commercial landlord because the landlord’s three-day notice demanded rent that had become due more than one year before the notice was served.

The tenant had failed to pay rent in January 2023 and underpaid February 2023 rent, but thereafter continued making monthly rent payments for approximately two years. The lease provided that payments would be applied to the tenant’s oldest outstanding obligations. The landlord therefore argued that each subsequent payment satisfied an earlier obligation, leaving the tenant continually one month behind. The Court rejected that argument. It held that Code of Civil Procedure section 1161(2) requires a three-day notice to be served within one year after the particular rent demanded in the notice originally became due. A contractual provision applying payments to the oldest outstanding balance does not change when the rent originally became due.

Accordingly, landlords should carefully review rent ledgers before preparing a three-day notice to pay rent or quit and should not include rent that became due more than one year before service of the notice. Older unpaid rent may still potentially be recoverable through a separate breach of contract action, but it cannot be used as the basis for a summary unlawful detainer proceeding under section 1161(2).

A copy of the Court of Appeal decision is available from the Court of Appeal’s website here: https://www4.courts.ca.gov/opinions/nonpub/B336071.PDF

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The law firm of Wallace, Richardson, Sontag & Le, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.