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State Laws Can Override Lease Provisions

Leases don’t always mean what they say.

That’s because there might be a state law that supersedes what is said in a lease--or in any contract, for that matter.

This basic legal principle is best illustrated in the landlord-tenant situation. By explaining it, we’ll reveal a little-known legal secret.

For many years, it was customary for a lease to provide for attorney fees when the landlord sued the tenant and won. It probably still is a common provision in some standard leases.

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Such a provision meant that if a landlord won a suit against a tenant, then the landlord could get the court to order the tenant to pay the landlord’s attorney fees. In the same case, with the same lease, if the tenant won, each party would pay their own attorney.

This outcome is determined by a state law that says that compensation of attorneys “is left to the agreement . . . of the parties.”

So the only way a tenant could ensure that he or she had the right to collect attorneys’ fees was to demand a change in the lease before it was signed.

But all that changed in 1968, when a new law was passed. That statute, Section 1717 of the California Civil Code, fixed the inequity. The legislature recognized that the bargaining positions of parties is not always equal and wanted to adjust for that when it came to attorney fees.

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In essence, the section says that when a contract has a provision for attorney fees, then no matter what the exact provision says, attorney fees will be awarded to the prevailing party.

The law does not require that the contract itself be worded along the lines of the statute, and there may be old forms still in use that seem to say that only one party has the right to collect attorney fees when they prevail in court. But that’s not the case.

Even if the contract says that only the landlord has the right to collect attorney fees if he or she prevails, citing this statute, the court should in most cases order the landlord to pay the tenant’s fees if the tenant prevails.

There, now you know this little legal secret, which you might find helpful when you negotiate your next contract or lease.

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