Lease provisions that cap attorney fees

In an ongoing series, we go over some key items contained in a proper California lease agreement, and one is a provision that limits the amount of legal costs the prevailing party can recover in an unlawful detainer action.

The prospect of a tenant winning a lawsuit and seeking attorney fees is like a bomb that is hidden in the basement of your rental property, so we have to anticipate this calamity.

Although our typical retainer for an unlawful detainer action is $5,000 - $7,500, the plaintiff faces financial risk when the lease agreement does not clearly spell out what attorney fees and costs can be awarded. If attorney fees are not capped, what you thought was a $7,500 matter can easily be tripled.

What we would like to see is a clause emphatically stating that each party is to bear their own attorneys’ fees and costs. In the absence of such an agreement, plenty of enterprising tenant attorneys are all too willing to litigate, regardless of the merits of the case.

A two-way street? 

We are not so concerned about “shaking down” tenants for legal costs. The prospect of recovering attorney fees from the outgoing tenant is dismal. Without an attorneys’ fees provision, the defendant will have to pay his or her own way or more likely than not, retain a free legal counsel from any number of nonprofits.

Related article: We impart a few remarks about opposing counsel ›

Avoiding litigation altogether

Litigation is not like a Warriors game or a 49ers game when one side wins and another side loses. At Bornstein Law, the goal is always to resolve a dispute as quickly and inexpensively as possible, taking into account time, risk, and expense. Ideally, we resolve the dispute without the need to broach the topic of recovering attorney fees from the other side.