Lease Doesn’t Give Tenant 10-Day Grace Period to Pay Rent

What Happened: A restaurant tenant signed a shopping center lease promising to pay monthly rent “on or before the first day of each month, without prior demand or notice.” On Feb. 1, 2023, with February rent unpaid, the landlord served the tenant a five-day notice to pay rent or quit the next day. The tenant did neither. So, on Feb. 9, the landlord sued to evict. The tenant insisted that the lease gave it an implied grace period of 10 days to pay monthly rent, but the court disagreed and granted summary judgment to the landlord. 

Ruling: The California appeals court agreed that this was an open-and-shut case and nixed the appeal.

Reasoning: The tenant’s claim of an implied grace period was based on Section 2.07 of the lease titled “LATE CHARGE,” which stated: 

Unless specifically stated otherwise in this Lease, all Rental or other charges required to be paid by Tenant pursuant to this Lease shall be due and payable ten (10) days after demand, without any notice from Landlord and without any deductions or offsets whatsoever.

Of course, the weakness in the tenant’s argument was the inclusion of the phrase “Unless specifically stated otherwise in this Lease.” In fact, the lease did include specific language “stating otherwise,” namely, Section 2.01(a) stating that the monthly rent was due “in advance on or before the first day of each month, without prior demand or notice.” Section 2.01(a) said nothing about a 10-day grace period; and it provided for an automatic late charge of 10 percent of whatever the tenant owed after 10 days. 

The final nail in the tenant’s implied grace period argument was Section 2.07, which specifically noted that the landlord’s acceptance of the late charge “shall in no event constitute a waiver of [Tenant’s] default with respect to such overdue amount, nor prevent [Landlord] from exercising any of the other rights and remedies granted in this Lease.” It would be absurd to interpret Section 2.07 as creating a 10-day period “after demand” when Section 2.01(a) expressly states that no demand is required, the court concluded.  

• Century City Mall, LLC v. Snowfin Franchise Grp., LLC, 2025 Cal. App. Unpub. LEXIS 966, 2025 WL 543207