I am a landlord of a small office building in (Palo Alto, CA) Santa
Clara County, CA.  It is rented out to pyschiatrists. One tenant has
long been a pain to deal with; always delaying and contentious in
renegotiating the terms of her lease etc.

I am planning to remodel one of the 2 bathrooms and add an another
office by integrating closet space now used by various clients with
extra space reclaimed by the bath remodel.  The difficult tenant has a
lease which ends in Jan. 2004.

I have offered her compensation for giving up her closet, replacement
storage in the basement, $5,000 worth of built-in storage in her
office at my cost and a rental reduction of 1/3 during the remodel. 
She has refused to give up her closet space.  I am fed up with trying
to appease her.  I would prefer that she just leave, then I can do the
remodel and find a nicer tenant afterwards.

I plan to give her immediate notice  (4 months and one week early)that
her lease will not be renewed.  (the lease calls for 90 days notice)

Would it be illegal or somehow considered retaliation if I inform her
now that the lease will not renewed? Can she cause problems for me???

She has reported me to City and I have not yet pulled permits for the
work to be done.

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Request for Question Clarification by serenata-ga on 24 Sep 2003 10:53 PDT

Marky94301 ~

Whether or not it is considered retaliation is probably not germane to
the issue here or the provisions of the lease regarding renewal.

What does the lease say about renewals?
Are you required to renew? Is the tenant required to renew to retain
occupancy?
What about occupancy by the tenant if the lease is not renewed?

On the surface, it seems you can notify the tenant by whatever
notification means are required within the Lease Agreement that:

1.) you will not be renewing the lease;
2.) you will be remodeling after the expiration of the lease;
3.) in light of her refusal of your offer of (list the offer), she
will be required to vacate the premises to accommodate the remodeling.
4.) what the remodeled space will consist of (less than she had
before, no doubt) and if she is interested in occupying the premises
after the remodel, she can notify you within 'x-number of days' from
your notification.

That seems reasonable, but your circumstances may be greatly changed
or this may not be possible due to the lease agreement you currently
have with the tenant.

In any case, you are reminded of the disclaimer at the bottom of this
page, and any 'answers' provided should not be considered as
substitution for professional advice.

Your best advice would be from your attorney - you do keep an attorney
on retainer as a landlord, don't you?

Regards,
Serenata