Colonial Manor, Inc. v. Reyes, JAD26-02

Background

Colonial Manor filed an unlawful detainer action after serving Reyes a three-day notice demanding $3,500 rent for March 2024, though the city had set the unit's maximum allowable rent at $669. 1
The stipulated facts showed Milton Reyes was the original tenant, defendant lived in the unit with him for at least one year before their 2022 marriage, and defendant continued occupying the unit after his death. 2
Defendant never paid rent to Milton Reyes and the parties never made any written, verbal, or implied lease transfer to defendant. 3
The trial court found defendant was not a sublessee or assignee, held she was protected by the SMRCCA, and ruled the notice defective because the rent increase was unauthorized. 4
On appeal, Colonial Manor argued the tenancy ended after Milton Reyes died, Costa-Hawkins preempted the SMRCCA, and plaintiff could raise rent without limit. 5
The appellate court affirmed, concluding defendant was an at-will tenant under an implied tenancy and that the SMRCCA was not preempted. 6
The court also held the overstated rent demand made the three-day notice fatally defective and supported judgment for defendant. 7

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Did Milton Reyes's tenancy terminate and decontrol the unit after his death? 8	Tenancy ended 30 days after Milton's last rent payment.	Defendant remained a lawful occupant and surviving spouse.	No; defendant remained protected and the unit was not decontrolled. 9
Is the SMRCCA preempted by Costa-Hawkins? 10	Costa-Hawkins allowed unlimited rent increases after Milton's death.	The SMRCCA validly protected lawful occupants and surviving spouses.	No preemption; the ordinances can be harmonized. 11
Was defendant a sublessee subject to unlimited rent increase under section 1954.53(d)(2)? 12	Defendant was a sublessee after Milton died.	Defendant was a tenant, not a sublessee.	No; defendant was not a sublessee or assignee. 13
Did defendant become an implied at-will tenant? 14	No tenancy existed with defendant.	Her long-term lawful occupancy created tenancy.	Yes; an implied at-will tenancy was created. 15
Was the three-day notice defective because it overstated rent due? 16	The rent demand was proper after death.	The $3,500 demand exceeded the lawful rent ceiling.	Yes; the notice overstated rent and was fatally defective. 17

Key Cases Cited

California Apartment Assn. v. City of Pasadena, 117 Cal.App.5th 187 (Cal. Ct. App. 2025) (statutory interpretation and preemption principles 18)
Mosser Companies v. San Francisco Rent Stabilization & Arbitration Bd., 233 Cal.App.4th 505 (Cal. Ct. App. 2015) (statutory purpose controls; different words imply different meanings 19)
Frazier v. Superior Court, 86 Cal.App.5th Supp. 1 (Cal. Ct. App. 2022) (elements of failure-to-pay unlawful detainer and municipal eviction regulation 20)
Action Apartment Assn., Inc. v. City of Santa Monica, 41 Cal.4th 1232 (Cal. 2007) (Santa Monica rent control background and Costa-Hawkins vacancy decontrol 21)
DeZerega v. Meggs, 83 Cal.App.4th 28 (Cal. Ct. App. 2000) (lawful occupants and continuation of original occupancy under Costa-Hawkins 22)
Parkmerced Co. v. San Francisco Rent Stabilization & Arbitration Bd., 215 Cal.App.3d 490 (Cal. Ct. App. 1989) (occupancy-based rent control protection extends to lawful long-term occupants 23)
Miller & Desatnik Management Co. v. Bullock, 221 Cal.App.3d Supp. 13 (Cal. Ct. App. App. Div. 1990) (tenant death ends tenancy and nonresident mother was not protected 24)
Cobb v. San Francisco Residential Rent Stabilization and Arbitration Bd., 98 Cal.App.4th 345 (Cal. Ct. App. 2002) (sublease definition; lawful occupancy can constitute tenancy under Costa-Hawkins 25)
Borden v. Stiles, 92 Cal.App.5th 337 (Cal. Ct. App. 2023) (permissive occupation without fixed term and rent creates tenancy at will 26)
Heffesse v. Guevara, 108 Cal.App.5th Supp. 74 (Cal. Ct. App. App. Div. 2025) (notice overstating rent due is fatally defective 27)
Jayasinghe v. Lee, 13 Cal.App.4th Supp. 33 (Cal. Ct. App. App. Div. 1993) (overstatement of rent in notice defeats unlawful detainer 28)