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Posts tagged "Residential Lease Agreement"

Arbitration Provisions in Residential Lease Agreements

Residential landlords must be careful in the wording and explanation of arbitration provisions in lease agreements, especially with Spanish speaking residents. In a recent case, Penilla v. Westmont, a California Appeals Court found that an arbitration provision in a mobilehome park rental agreement was unconscionable, and thus unenforceable, when it (1) substantially benefited the landlord, (2) imposed fees and limitations that would have substantially deterred residents from asserting their claims and (2) 15 of the 46 named parties spoke little or no English. The arbitration agreement, attached to the lease, required the tenants to pay half of the arbitration costs up front and determined that a failure to do so would result in a default judgment in favor of the landlord. The court found that due to the low income nature of the tenants, virtually none of them would be able to afford the cost of arbitration.

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Loftin | Bedell P.C.

Loftin | Bedell P.C.
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