The California Court of Appeal recently reviewed a case that dealt with a group of mobile home park tenants who sued their landlord for a number of causes of action, including breach of contract, breach of quiet enjoyment, negligence, and breach of habitability. Bevis v. Terrace View Partners reviews whether a landlord could be held civilly liable for charging rent pursuant to a contract or raising rents to a month-to-month tenant.

In general, a landlord can charge the landlord wants as rent to a tenant absent a rent control law. Therefore, the Court found that a landlord could not be civilly liable for charging rent that was agreed upon in a rental agreement or not precluded in a month to month agreement. The Court further found that a landlord could not held liable for negligence for charging high rent, particularly when agreed upon in a rental agreement. Charging high rent alone is not actionable.

In Bevis v. Terrace View Partners, the jury in the trial court awarded the tenants that were plaintiffs in the lawsuit $1,289,000 in compensatory damages and $57 million in punitive damages. The Court entered a judgment for punitive damages of $1,289,000. The appellate court found that the the tenant’s damages would have to derive from the conditions in the mobilehome park and not the fact that rents being charged were above average rents in the area. The appellate court reversed the judgment requiring a new trial.

The fact that rents were higher than the market rate was not actionable unless there were actual conditions in the mobilehome that gave rise to damages, i.e. claims of habitability or breaches of quiet enjoyment. This case exemplifies the difference between rent control and non-rent control jurisdictions. In certain rent control jurisdictions, if a landlord charges a rent that does not conform to the local rent control law, a tenant has a right to offset unpermitted rents or ask for them to be returned. In non-rent control jurisdictions, generally a tenant cannot ask for rent to be returned if it is “high.”