Reported / Citable
Background
Civil Code section 1940.1 was enacted to address the so-called “28-day shuffle” practiced by some hotels: requiring guests to check out and reregister every 28 days to prevent them from accruing tenant protections that would attach after 30 days of continuous occupancy. The statute creates a private right of action for plaintiffs who can prove (1) they occupied a residential hotel, (2) the hotel required them to move out or reregister before 30 days, and (3) a purpose of the move-out policy was to maintain transient occupancy status.
The defendants own a 134-room economy hotel (Red Roof Inn) in San Dimas. Since at least 2018, the hotel has enforced a maximum 28-day stay policy applicable to all guests, requiring them to check out and vacate for at least three days before reregistering. A hotel representative acknowledged that one purpose of the policy was to avoid creating a landlord-tenant relationship.
Plaintiffs Melissa Aerni and Katherine Atsaves stayed at the hotel for multiple 28-day periods between June and November 2022. They filed a putative class action under section 1940.1, seeking to represent all hotel guests who had been required to move out after 28 days. The trial court found the proposed class numerous, ascertainable, and adequately represented, but denied class certification on the ground that individualized issues predominated. Specifically, the trial court interpreted section 1940.1 as requiring individualized proof that each class member used the hotel as their primary residence.
The Court’s Holding
The Second District Court of Appeal, Division Three, reversed the order denying class certification and remanded. The court held that the trial court erred by interpreting section 1940.1 to require individualized proof of each class member’s primary residence at the hotel.
Section 1940.1’s definition of a residential hotel turns on the building, not on the individual guest. A residential hotel is a multi-unit building used or intended to be used as guests’ primary residence, unless the building is primarily used by guests who stay fewer than 30 days and have another primary residence. The character of the building is determined by aggregate use patterns, not by parsing each guest’s individual living situation.
For class certification purposes, the question whether the hotel qualifies as a residential hotel is a common one that turns on building-wide evidence. The class members’ individual circumstances do not need to be proved one by one. The trial court’s contrary interpretation conflated the building-level inquiry with an individualized inquiry, undermining the statute’s purpose of curbing the 28-day shuffle in residential hotels.
The case was remanded for the trial court to revisit class certification under the proper interpretation of section 1940.1. The court emphasized that the elements of the cause of action remain unchanged; what changed is how those elements are evaluated for purposes of determining whether common questions predominate.
Key Takeaways
- Civil Code section 1940.1’s “residential hotel” definition turns on the building’s overall use pattern, not on the individual circumstances of each guest.
- Whether a hotel qualifies as a residential hotel under section 1940.1 is a common question for class certification purposes that does not require individualized proof of each plaintiff’s primary residence.
- The 28-day shuffle—requiring guests to check out and reregister before reaching 30 days of continuous occupancy—is the specific practice section 1940.1 was designed to curb.
- Class certification analysis must be guided by the actual elements of the underlying cause of action; misinterpretation of substantive law can lead to erroneous denial of certification.
- A hotel representative’s admission that a 28-day policy is designed to avoid creating a landlord-tenant relationship is strong evidence on the third statutory element (purpose of the move-out policy).
Why It Matters
This decision is important for tenant rights advocacy in California, where many low-income guests rely on residential hotels for housing that is technically labeled as transient. The opinion strengthens the ability of plaintiffs to bring class actions challenging the 28-day shuffle by clarifying that the residential hotel determination is building-wide, not individualized.
For hotel operators, the decision is a sharp warning that systematic 28-day stay policies, especially those acknowledged to be designed to avoid landlord-tenant obligations, may face certified class action liability under section 1940.1. Operators of economy hotels, motels, and similar lodging facilities should carefully review their policies and consider whether they qualify as residential hotels under the building-use test. For class action lawyers, the case provides a useful precedent for resisting trial court attempts to manufacture individualized issues from elements that should be evaluated at the class-wide level.