The Three-Day Notice Has a One-Year Deadline
A commercial landlord did not act on unpaid rent from early 2023 for two years, then served a three-day notice for it and filed an unlawful detainer. It won at trial: possession, $65,989 in past-due rent, and $123,111 in holdover damages. On September 9, 2026 the Court of Appeal reversed the whole thing and directed the trial court to enter judgment for the tenant.
The case is Universal Shopping Plaza v. Hong (Sept. 9, 2026, B348490), Second Appellate District, Division Seven, certified for publication. The statute it turns on is a single sentence, and it sits in a part of Code of Civil Procedure section 1161(2) that is easy to miss.
A note on posture before anything else. The decision is citable now under California Rules of Court, rule 8.1115(a), but it is recent. The rehearing window under rule 8.268(b)(1) closed September 24, 2026. The decision becomes final in the Court of Appeal thirty days after filing, and a petition for review may be served and filed within ten days after that. If review were granted the opinion would lose binding effect and could be cited only for its potentially persuasive value, unless the Supreme Court ordered otherwise. As of this writing no official Cal.App.5th citation has issued, and the correct form is the slip opinion by date and docket.
What does section 1161(2) actually require?
Subdivision (2) of section 1161 is mostly a list of things a three-day notice must contain: the amount that is due, the name, telephone number and address of the person to whom rent is to be paid, the usual days and hours that person is available if payment may be made personally, or an account number and the name and street address of a financial institution within five miles of the rental property, or a previously established electronic funds transfer procedure.
The requirement at issue is not in that list. It is the first sentence of a separate, unnumbered second paragraph:
> "The notice may be served at any time within one year after the rent becomes due."
One sentence. No exception, no proviso, no cross-reference.
California requires strict compliance with the unlawful detainer statutes, including that sentence. As the Supreme Court put it in Stancil v. Superior Court (2021) 11 Cal.5th 381, 394-395, "[g]iven the need for quick, peaceful resolutions of unlawful detainer actions, the statutory procedures must be strictly adhered to, including the stringent requirements for service, notice, and filing deadlines." Dr. Leevil, LLC v. Westlake Health Care Center (2018) 6 Cal.5th 474, 480, is to the same effect.
What happened in the Hong case?
Hong operated a restaurant in Universal's shopping center under a commercial lease. The original five-year term expired in 2021 and the parties continued month to month. Paragraph 4.1 made rent due "on the first day of each calendar month."
In January 2023 Hong paid no rent, and in February 2023 he underpaid by $8,600, believing he was owed a rent reduction of $65,989 for 2022. The landlord sent a notice of breach in January 2023 and then did nothing. Hong paid full monthly rent from March 2023 through February 2025.
On February 12, 2025, the landlord served a three-day notice demanding $65,989 — the 2023 shortfall, and nothing else. It filed suit thirteen days later.
The landlord's theory rested on paragraph 4.5 of the lease: "All payments received by [Universal] from [Hong] . . . shall be applied to the oldest payment of obligation owed by [Hong] to [Universal]." If every payment goes to the oldest balance, the argument ran, the tenant was continuously in arrears and a fresh default rolled forward each month.
The court rejected it. Section 1161(2), it held, "requires a three-day notice be served 'within one year after the rent becomes due,' not on the date the landlord decides the lease has been breached under a contractual provision delaying for one month at a time any default in the nonpayment of rent." The unpaid rent became due in early 2023; the notice had to be served no later than February 1, 2024; it was not; the notice was invalid.
The policy line is the one worth remembering: "Under Universal's interpretation, a landlord could take no action on a missed rent payment for years, then, once prevailing market rates increase, pursue a summary eviction of the tenant with just three days' notice."
How far does this decision actually reach?
Four limits, because the holding is narrower than the result suggests.
It does not invalidate application-of-payments clauses. The court said the clause "does not modify the date 'rent becomes due' under paragraph 4.1," while expressly allowing that it "might affect the total amount owed for a prior failure to pay rent and (potentially) the running of the limitations period for a breach of contract action." The clause survives. It simply cannot move the trigger for a three-day notice.
It does not make every notice that mentions old rent defective. Levitz Furniture Co. of the Pacific, Inc. v. Wingtip Communications, Inc. (2001) 86 Cal.App.4th 1035 held that a demand including out-of-window rent does not invalidate a notice so long as the notice also specifies unpaid rent falling within the year — the landlord simply recovers only the in-window portion in the unlawful detainer. The Hong court reaffirmed that in a footnote and distinguished its own facts: "In this case, the entire amount of unpaid rent fell outside the one-year window."
It does not decide anything about residential tenancies. This was a commercial lease. The one-year sentence itself does not distinguish commercial from residential tenancies, but the court did not address residential application, and this decision should not be cited as having decided it.
It does not address Code of Civil Procedure section 1161.1. The opinion does not mention that section. That leads to the point most likely to matter to a commercial landlord.
Does the good-faith estimate safe harbor help?
The court did not reach section 1161.1. What follows is our reading of the text, not a holding.
Section 1161.1 applies only to commercial real property and gives commercial landlords a cushion that residential landlords do not have. Under subdivision (a), if the amount stated in the notice "is clearly identified by the notice as an estimate and the amount claimed is not in fact correct," but rent was in fact owing and "the amount claimed in the notice was reasonably estimated," the tenant is still subject to judgment for possession and the actual amount found due. Subdivision (e) supplies a presumption that an estimate is reasonable if it is within 20 percent of the amount determined to be due.
Read what that safe harbor is addressed to. Every operative phrase is about the accuracy of the dollar figure: the amount claimed, not in fact correct, reasonably estimated, 20 percent more or less. No provision of section 1161.1 addresses the time within which the notice must be served.
Our reading — and this is analysis rather than a holding, because the Hong court never reached it — is that the estimate safe harbor is structurally incapable of curing a timing defect. A notice can be accurate to the penny and still be served too late. Commercial landlords who treat the 20 percent cushion as general protection against a defective notice are relying on a provision aimed at a different problem.
The same goes for the partial-payment rules. Subdivisions (b) and (c) of section 1161.1 tell a commercial landlord how to handle partial payments received after a notice is served and after a complaint is filed. Neither addresses how payments made before any notice are allocated, which is exactly what paragraph 4.5 tried to do.
What happens to a landlord who serves a late notice?
The unlawful detainer fails, and it fails on the merits rather than being dismissed. In Hong the Court of Appeal reversed and remanded "for the trial court to enter a new judgment in favor of Hong," with costs on appeal to the tenant.
The holdover damages went too. A void notice cannot support the possession judgment or the damages that follow from it — $123,111 in that case.
A tenant who believes a notice is untimely should not stop paying rent or ignore the summons on that basis. The one-year period runs separately for each month's rent, the calculation turns on the dates in the lease and the payment history, and an untimely notice is a defense to be raised in the action within the very short time an unlawful detainer summons allows.
The landlord is not without a remedy, but it is a slower one. As WDT-Winchester v. Nilsson (1994) 27 Cal.App.4th 516, 526, put it, a landlord who fails to comply is left to "an ordinary suit for breach of contract with all the delays that remedy normally involves and without restitution of the demised property." The Hong court made the same point, noting the landlord could still sue on the contract within the four-year limitations period for a written contract, which runs from the breach rather than from the notice. The court's own footnote cites "Civil Code section 337"; the four-year written-contract statute is Code of Civil Procedure section 337. The Hong court also allowed that a payments clause might affect how that period runs, so the date should be worked out against the lease and the payment history rather than assumed.
Here is the part that makes this a deadline case rather than a drafting case: on the reasoning of Hong, re-serving a corrected notice does not help. Where the defect is an overstated amount or a missing payee detail, a landlord can serve a compliant notice and start again. Where the defect is the one-year limit, the rent only gets older. Once the window on a given month closes, that month cannot again support a three-day notice for the same rent. The money is a contract claim, and possession requires a different, timely ground.
The practical instruction for a landlord managing arrears is the inverse of what Universal did. Serve on current rent rather than on the stale balance, and compute the demand carefully. Under Levitz a notice that also demands in-window rent survives, but the landlord recovers only the in-window portion. Where a lease applies payments to the oldest balance, what counts as current may not be obvious. An overstated demand creates its own exposure unless the notice identifies it as an estimate and the estimate is reasonable under section 1161.1. And accepting payment after the notice period expires raises separate waiver questions, which section 1161.1, subdivisions (b) and (c), address for commercial tenancies.
Two other recent decisions belong on any landlord's reading list. Eshagian v. Cepeda (2025) 112 Cal.App.5th 433 — from the same division — invalidated a residential notice for three separate content defects. City of Alameda v. Sheehan (2024) 105 Cal.App.5th 68, from the First District, held that the "person" to whom rent is payable can be a corporation, but the notice must give the correct and complete corporate name. Division Seven has now issued two strict-compliance reversals — Eshagian and Hong — in fifteen months.
What has not been settled?
Whether the same rule reaches residential tenancies in the same way. The statutory text does not distinguish, but no court has said so on these facts.
Whether a landlord can route around the limit through section 1161(3). The one-year sentence is tied to rent becoming due and appears only in subdivision (2). Subdivisions (3), (4) and (5) contain no analogous time limit. Whether a landlord can recast stale nonpayment as a covenant breach and serve a three-day notice to perform or quit is a question the Hong court did not address, and the reasoning cuts against it. Waiver and laches would also be in play.
Whether section 1161.1 could ever cure a timing defect. As above, we think not, but the court did not decide it.
Whether this is the first appellate treatment of the one-year sentence since Levitz. It appears so from our research, which found no intervening published decision on that provision in twenty-five years. We could not run a citator, so we state it as a research result rather than a fact.
This article states the law as of September 27, 2026. Our contract disputes page describes how we approach commercial lease litigation, and our reference on California real estate litigation deadlines collects the other clocks that run alongside this one. For the parallel problem on the ownership side, see our article on what happens to rents when an income property defaults.
Frequently asked questions
How long does a California landlord have to serve a three-day notice for unpaid rent?
One year from the date the rent became due, under the text of Code of Civil Procedure section 1161, subdivision (2), which does not distinguish commercial from residential tenancies. That sentence sits in its own paragraph, separate from the list of things the notice must contain, and it has no stated exception. In Universal Shopping Plaza v. Hong, a commercial case, the Court of Appeal held a notice served roughly two years after the rent came due was invalid and could not support an unlawful detainer judgment. The decision is recent and not yet final, and it did not address residential tenancies.
Can a lease change when rent becomes due for purposes of the three-day notice?
Not for this purpose. The lease in Hong provided that all payments apply to the oldest obligation owed, and the landlord argued this kept the tenant continuously in default. The court held the clause does not modify the date rent becomes due under the rent provision, which is the triggering event for the one-year period. The court allowed that the clause might still affect the total amount owed and the limitations period for a breach of contract action, so the clause is not invalid. It simply cannot move the deadline.
Is a three-day notice void if it demands rent that is more than a year old?
Only if all of it is, and only on this ground. A notice can still fail for other reasons, such as an overstated amount or a missing payee detail. Under Levitz Furniture Co. of the Pacific, Inc. v. Wingtip Communications, Inc. (2001) 86 Cal.App.4th 1035, a notice that includes out-of-window rent is not invalidated so long as it also demands unpaid rent falling within the year, and the landlord recovers the in-window portion in the unlawful detainer. The landlord in Hong lost because the entire amount demanded fell outside the window.
Does the commercial good-faith estimate rule protect a late notice?
The Hong opinion does not address Code of Civil Procedure section 1161.1, so there is no holding on this. We read the text this way: that section addresses whether the dollar amount stated in a commercial notice was correct or reasonably estimated, including a presumption of reasonableness within 20 percent, and no provision of it addresses the time within which the notice must be served. A notice can state the right amount and still be served too late, so in our view a commercial landlord should not treat the estimate provisions as protection against a timing defect.
What can a landlord do after the one-year window closes?
Sue on the contract. The unlawful detainer route is gone for that rent, and re-serving a corrected notice does not revive it, because the rent only becomes older. The Hong court reversed the judgment entirely, including the holdover damages, and directed entry of judgment for the tenant, while noting the landlord retained a breach of contract claim subject to the four-year limitations period for a written contract. Possession is not necessarily gone either: it requires a different and timely ground, such as a current default or a separate covenant breach. Whether stale nonpayment can be recast under another subdivision of section 1161 is unsettled. A landlord managing arrears should serve on current rent rather than on a stale balance.
This article is general information about California law, not legal advice, and reading it does not create an attorney-client relationship. Statutes and case law change, and how they apply depends on the specific facts. Attorney advertising. Prior results do not guarantee similar outcomes. Robert B. Mobasseri, State Bar No. 193193, ROMO Law Group, Encino, California.