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Timing Of A Three-Day Notice To Pay Or Quit |
by Verna L. Porter, Esq.
A case interpreting state laws can have as much impact as the statutes themselves. In a recent article, I discussed the importance of a case interpreting the Ellis Act.
Gans vs. Smull is another recent case certified for publication on August 29, 2003.
It interprets the laws about holidays in the State of California as applied to performance of acts required by contract.
The case involved a 25-year lease for commercial premises. the lease contained two successive five-year options to extend. The lease also requires that to exercise the options, the tenant must notify the landlord in writing on or before 60 days prior to expiration of the lease.
The sixtieth day fell on a Saturday. The lessee attempted to exercise the option by mailing notice on the following Monday. The question facing the court was whether or not the fact that the sixtieth day fell on a Saturday extended the period during which the option could be exercised through Monday. The court held that the period was not extended.
The court carefully examined statutes governing performance of acts required by law or by contract. Special consideration was given to the method of computing time and also to the definition of "holiday."
The court concluded that if an act is required by law to be performed, then if the day on which it must be performed falls on a Saturday, Sunday, or government holiday, the time is extended through the next business day.
If an act is required to be performed by contract, and the day for performance falls on a Saturday, the time is not extended. If the date for performance falls on a Sunday or holiday, the day for performance is the first business day following.
Applying The Case To Service Of A Three-Day Notice
If a rental agreement calls for payment of rent on a date that falls on a Saturday, it appears that a three-day notice to pay rent or quit could be served the next day. The date for performance is not extended.
An exception not discussed by the court is another statute providing that if the date for performance of an act required by contract falls on an "optional" bank holiday, if the act must be "performed by, at, or through any bank organized under the laws of or doing business in this state, then that date is not a business day."
If an owner specifically requires that rent may only be paid by bank-certified funds, paid by direct deposit or wired to a bank, then if the due date falls on an optional bank holiday, payment is postponed.
If a three-day notice has already been served, computation of the time during which rent can be paid is different. In that case, it is state law rather than contract law that requires payment to be made within three days. Therefore, if the third day of a three-day notice to pay rent or quit falls on a Saturday, Sunday, or holiday, the period is extended to the next business day.
Application Of The Case
Most judgements in unlawful detainer cases are not appealed. This particular case was appealed because of the strong economic interest of both sides. Also, the case originated in the "unlimited" jurisdiction of the court.
When the case was appealed, it went to the appellate courts of the State of California rather than to the appellate division of the Superior Court, thus the case has much broader significance. The appellate district covers the County of Los Angeles and nearby counties. It applies to most cases that would be filed by readers of this magazine.
All lower courts residing in a particular appellate district are required to follow the rulings of that appellate court. Other appellate districts have an option as to whether or not to follow the precedent.
This case has not yet been applied by our local courts. If a court chooses not to conform to the ruling, then even though that court would be incorrect in refusing to follow precedent, an owner would find it expensive to appeal. Probably, the owner would start the case anew.
Therefore, some owners may prefer to be cautious and continue with their practice of refraining from serving a three-day notice to pay rent or quit if the rental due date falls on a Saturday until after the tenant has had a normal business day to pay. Other owners may elect to become pioneers and test the courts.
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