How to Handle Commercial Lease Disputes in California – Steps

Updated on September 27, 2023

As Los Angeles real estate attorneys, one of the most frequent types of cases that we handle are commercial leasing disputes. We handle these disputes for both commercial landlords and commercial tenants.

Here, we are going to begin a 5 part series on how to handle these disputes. It does not matter whether your leasing dispute is in Los Angeles, Santa Monica, Culver City, Beverly Hills, Van Nuys, Woodland Hills, Sherman Oaks, Hollywood, West Hollywood, Downtown Los Angeles, Mid-Wilshire, Orange County, Riverside, or anywhere else in the state of California, a good real estate attorney should follow a few basic steps at the outset of the case.

The first step for any commercial leasing disputes is to review the terms of the lease (the contract) in great detail. Reviewing the contract or the lease is the most important step because it is what controls the landlord/tenant relationship.

Here are a few things to look for upon first review of the lease:

1. The Parties to the Lease: Make sure you are dealing with the right parties. Look at whether you are dealing with a corporation or an individual.
2. Default Provision: What does the default provision of the lease state? Is there a differentiation between defaults based on a lack of payment of rent versus a breach of a covenant of the lease? These are important distinctions.
3. Dispute Resolution Mechanism: It is becoming more and more common for commercial leases, purchase and sale agreements and many other types of contracts to contain alternative dispute resolution mechanisms. In other words, we are seeing more and more contracts that call for arbitration, mediation or even judicial reference. If there is an alternative dispute resolution mechanism (alternative to the court system) it is important that the parties comply with it in order to avoid unnecessary motions in court (to fix problems with pursuing an action in the wrong forum).
4. Attorneys’ Fees: Most commercial leases contain attorneys’ fees provisions. These provisions generally provide that the prevailing party in the dispute (the winner) will be able to be reimbursed their reasonable attorneys’ fees if the lawsuit, arbitration or judicial reference ends in their favor. Of course, determining the prevailing party and the reasonable amount of attorneys’ fees is left up to the judge, arbitrator or retired judge.

Step 2 in this process will be in our next blog post. In the meantime, contact us at (310) 954-1877, send us an email at [email protected], or through our Contact Form, to see if you qualify for a free consultation regarding your commercial leasing disputes.