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ALERT: SB 1103 – Commercial Rent Control Provisions Added to Already Bad Bill on Leasing

A bill has just been amended in the Legislature to include some commercial rent control provisions for certain tenants, including restaurants with up to 25 employees, non-profit organizations with up to 50 employees, and any corporation that qualifies as a microenterprise.

The bill also subjects property owners to new penalties, fines, and provides tenants with an affirmative defense in unlawful detainer actions, which can tie up space for months on end. 

CBPA believes this bill—and the new amendments from today—may significantly impact property owners/managers, and we are seeking confirmation and input on how the bill would impact your companies.

As many of you know, CBPA has been leading the opposition against Senate Bill 1103 (Menjivar; D – Van Nuys), a bill that previously would have simply disrupted the commercial leasing landscape by imposing requirements detrimental to both property owners and small businesses and nonprofits this bill aims to protect.

The bill initially proposed to cap security deposits at one month’s rent, disregarding the role of deposits in risk management and post-tenancy restoration efforts. Such restrictions could deter property owners from leasing to emerging businesses, contradicting the bill’s intent to support them. A crucial oversight of SB 1103 is the failure to differentiate between the dynamics of business-to-business and business-to-individual transactions, which are drastically different.

Amended today, you can see the new version of the bill by clicking here, SB 1103. And for those unfamiliar with reading amended legislative bill language, below you can find a markup of current law that will help you identify the changes being proposed by this measure.  The bulk of the provisions that impact leasing and costs can be found in Section 5.

The bill will be heard next Tuesday.

Contact your legislators TODAY and urge them to oppose SB 1103. Together, we can safeguard the vitality of our commercial real estate market and ensure a thriving environment for businesses of all sizes.