Reported / Citable
Background
The Bradburys leased commercial space from Ashirwad, LLC for a salon. As the March 2020 lease expiration approached, Jeannette Bradbury decided to retire and tried to help find a replacement tenant. The same week, California issued the COVID-19 stay-at-home order, forcing the salon to close. Ashirwad assured the Bradburys not to worry about salon equipment left at the property.
One day before the lease expired, the Bradburys paid Ashirwad $4,179 (one month’s rent), with a handwritten note thanking Ashirwad for understanding and signed with a hand-drawn heart. Three months later, the Bradburys paid an additional $2,100. They made no other payments. Neither party discussed whether the tenancy would continue on a month-to-month basis. When the Bradburys returned the keys months later, Ashirwad demanded unpaid rent for May through October 2020, asserting that the March payment had created a month-to-month tenancy under Civil Code section 1945.
After a bench trial, the court found the Bradburys had rebutted section 1945’s presumption and that there was no contract between the parties after the lease expired. Ashirwad appealed.
The Court’s Holding
The Court of Appeal affirmed. Civil Code section 1945 creates a presumption that, when a tenant remains in possession and the landlord accepts rent after the lease expires, the parties have agreed to continue the tenancy on the same terms (typically month-to-month). But the presumption is rebuttable, and the trial court’s bench-trial finding that the Bradburys rebutted it was supported by substantial evidence.
Specifically, Jeannette testified that she made the March 2020 payment as a goodwill gesture (a ‘gift’) reflecting the parties’ good personal relationship, not as ongoing rent. Ashirwad’s repeated assurances about the salon equipment, the parties’ silence about continuing the tenancy, and the broader COVID-related context all supported the trial court’s finding that no continuing tenancy was intended.
The court rejected Ashirwad’s argument that the issue was purely legal. Without a record of the oral proceedings, the appellate court could not assess substantial-evidence challenges to the trial court’s factual findings about the parties’ conduct and intent. The trial court did not err as a matter of law in its application of section 1945.
Key Takeaways
- Civil Code section 1945’s holdover-tenancy presumption is rebuttable, and trial courts may consider extrinsic evidence of the parties’ intent and conduct.
- A single rent-equivalent payment after lease expiration does not necessarily establish a month-to-month tenancy when the surrounding circumstances negate that intent.
- Goodwill payments and explanatory notes (especially when contextualized by COVID-19 closure orders and friendship) can support rebutting the section 1945 presumption.
- Appellate review of bench-trial factual findings is highly deferential; appellants must provide a complete record (including reporter’s transcript) to challenge such findings.
- Landlords and tenants should expressly memorialize tenancy intent after lease expiration; ambiguity invites litigation.
Why It Matters
For California commercial landlords and tenants, this decision is a useful reminder that lease-expiration rights and obligations should be addressed expressly, ideally in writing. The section 1945 presumption is not bulletproof, and trial courts will look at the totality of the parties’ conduct — including informal communications and contextual factors like the COVID-19 closure orders.
For commercial landlords, the case is a cautionary tale about relying on the section 1945 presumption to convert post-expiration payments into ongoing tenancy obligations. Landlords should send promptly clear written communications confirming continuing tenancy terms or demanding clear vacatur. For tenants, the case provides authority for rebutting the section 1945 presumption when payments are clearly made as goodwill gestures rather than ongoing rent. For appellate counsel, the decision is a forceful reminder that appealing bench-trial findings without a reporter’s transcript is generally a losing strategy.