Purchase and Sale Agreement May Create Landlord-Tenant Relationship Such That Seller May Bring Unlawful Detainer Action

In Taylor v. Nu Digital Marketing (decided February 29, 2016), the Taylors (the “Sellers”) and Nu Digital Marketing (the “Buyer”) entered into a “Contract of Sale of Residential Property”. Under the agreement, the Sellers agreed to sell real property to the Buyer for $1,250,000 subject to various conditions including the requirement that the Buyer make “Probationary Installment” payments of $2,300 per month for 60 months. The agreement further provided that if any payment was late, the Sellers could serve a Five (5) Day Notice to Quit.  If the Buyer failed to cure the payment within the five-day notice period, the Buyer was required to vacate the property.  In June 2013, the Sellers filed an unlawful detainer (eviction) action against the Buyer due to an alleged failure to make certain “Probationary Installment” payments.  The trial court entered judgment in favor of the Sellers and against the Buyer for possession of the property and damages.  The Buyer appealed.  On appeal, the Buyer argued that the agreement created a seller-buyer relationship rather than a landlord-tenant relationship and hence, according to Nu Digital Marketing, the unlawful detainer statutes were not applicable. The Court of Appeal disagreed.  It held that the Probationary Installment payments created a landlord-tenant relationship despite the name of the agreement.  Accordingly, it upheld the trial court judgment. (See, Taylor v. Nu Digital Marketing (2016) 245 Cal.App.4th 283).  

For further information, please contact Wallace, Richardson, Sontag & Le, LLP at (949) 748-3600; website: www.rwclegal.com. 

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.

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