California hotel and motel owners should take note: a recently publicized class action settlement is putting a common industry practice under the microscope, and the financial consequences can be significant.
A Wake-Up Call for Hotel Owners
In Flores v. Leo’s Motel, et al., a proposed $500,000 class action settlement has brought attention to how some hotels manage extended guest stays. While the case is still in the settlement approval stage, the allegations alone highlight a serious compliance risk.
According to publicly available information, the plaintiff claimed that once he approached 28 consecutive days of occupancy, the hotel required him to check out for at least 24 hours before re-registering. The same practice was allegedly applied to other guests.
This approach, often referred to as the “28-day shuffle”, is alleged to be used to prevent guests from reaching 30 consecutive days of occupancy, which can trigger important legal protections under California law.
Why the “28-Day Shuffle” Can Be Costly
Under California Civil Code § 1940.1, hotel operators cannot require a guest to move out or re-register before 30 days if the purpose is to maintain the guest’s status as a transient occupant.
The law goes even further:
- Requiring a guest to check out and re-register may create a presumption of unlawful intent
- Violations can result in $500 penalties per incident
- The prevailing party may recover attorney’s fees
For properties that routinely host longer-term guests, this can quickly escalate into substantial liability—especially in a class action context.
Are You Operating a “Residential Hotel”?
Many owners are surprised to learn that their property may fall under California’s definition of a “residential hotel.”
Under Health & Safety Code § 50519, a residential hotel generally includes buildings with six or more units where guests use the property as their primary residence—even if the property markets itself as a hotel or motel.
If your guests are staying for extended periods, you may already be subject to these rules.
What This Means for Your Business
Practices that may have once seemed like routine operational policies can now expose your business to:
- Class action lawsuits
- Statutory penalties
- Significant legal fees
- Reputational harm
And importantly, intent does not need to be proven directly—the law allows courts to infer improper purpose based on conduct alone.
Protect Your Business Before It’s Too Late
The takeaway is simple: if your property accommodates longer-term guests, you need to ensure your policies comply with California law.
Even well-intentioned practices can create liability if they are viewed as an attempt to avoid tenant protections.
Now is the time to review your policies—not after a lawsuit is filed.
Contact Our Hospitality Law Team
Our firm regularly advises hotel and motel owners on compliance strategies to minimize risk and avoid costly litigation.
If you have questions about:
- Long-term guest policies
- Occupancy classifications
- Compliance with California Civil Code § 1940.1
- Risk mitigation strategies
We are here to help.
Contact us today to schedule a consultation and protect your business from avoidable penalties.
