In Leasing an "In-Law" Apartment Don't Be "In Pari Delicto" - Beware of an Exception for Legal Enforcement of Illegal Contracts

Leasing an "unwarranted" unit contains inherent risks: recent court cases often treat such lease agreements as illegal contracts, a finding leading to a set of scary, but possible discussions, ranging from such lease being simply unenforceable to a claim for restitution of back rents. A question then naturally arises, what can be done with an illegal contract, and are there any exceptions or conditions for its enforcement. The basic rule is that the contracting parties are both "in pari delicto" and neither can enforce the contract or recover therefrom. There is, however, an exception developed in California, which still lets one side to such allegedly illegal contract to recover from the other. An exception itself is not new, but its application to "illegal" leases developed more recently.

Update 03-07-14: San Francisco pilot program for legalizing in-law apartments got approved at the Planning Commission level.
Update 04-07-14: Board of Supervisors approves the pilot program
Update 02-21-16: Decision in Chen v Kraft invalidated a lease with an unlawful object, under CC § 1598.

New Condo Conversion Ordinance

The famous condo conversion lottery is now suspended, and there are new rules now governing the process. The San Francisco Board of Supervisors adopted changes and amendments to the SF Subdivision Code, Sections 1396, 1396.4, and 1396.5. You can read a final version of the Ordinance No. 117-13 here.

F. Lee Bailey is coming back

I was preparing a post on language tools, when I thought of F. Lee Bailey. A quote from his book "To Be a Trial Lawyer" will be a great opener for the subject. I searched for the links and found out that he was actually disbarred for several years and just recently (June 2013) got his clearance to practice law again.

A Case For July 4

I came across a good case to present for the July 4: Nixon v. United States, 978 F.2d 1269 (D.C. Cir. 1992). I was looking to find a case describing past presidents, seeing if any decision reflected the fact that three presidents died on that day. I found this case instead, and, although it does not directly relate to July 4th, it has all the elements of a rightly fitting case for the occasion.

More on LLC's Personhood

A couple of recent cases, issued within a week of each other, touched on the subject of entity's personhood, seemingly from two opposite sides of the problem.