A California commercial lease agreement is a legally binding contract for businesses renting commercial properties within the state. The document covers terms for leasing industrial, retail, and office spaces. It includes premises description, lease term, rent, option to renew, expenses, security deposit, and insurance requirements.
Commercial leases in California are subject to state-specific considerations, including subletting permissions, prohibition of key money, absence of rent control for commercial properties, and eviction procedures. A detailed agreement is essential to avoid legal ambiguities and ensure clarity on rights and protections for landlords and tenants.
California Business Entity Search: Landlords can verify the registration status of any entity in the state.
REQUIREMENTS
Rental Laws: California Civil Code Division 3, Part 4, Title 5, Chapter 2.6 (Commercial Rental Control).
Consumer Protection Laws: Cal. Com. Code § 10104.
Jurisdiction: Under Cal. Com. Code § 10106, the chosen law and judicial forum must align with the jurisdiction where the lessee resides, where the property is located, and where the lease is signed. Any deviation from these criteria renders the chosen law or forum unenforceable.
Required Disclosures
- Certified Access Specialist (CASp) Report: The lease should indicate if a Certified Access Specialist inspected the property. If so, the tenant should receive a copy of the CASp report (CIV § 1938 (a)(b)).
- Right to Cancel: If the CASp report isn’t provided to the tenant at least 48 hours before lease signing, they have the right to cancel the rental agreement within 72 hours after signing.
- Inspection Certificate: If the property meets all accessibility standards, the tenant must receive a copy of the inspection certificate within seven days of lease signing, along with the CASp report if not already provided.
- No CASp Certificate: If the property lacks a disability access inspection certificate, the lease must include a legal notice about the tenant’s right to a CASp inspection.
- Death on the Property (PDF): Tenants must be informed of any deaths on the property within the past three years, excluding those due to HIV or AIDS-related complications (CIV § 1710.2(a)(1)).
- Energy Use: For properties over 50,000 square feet or multi-family buildings with 17+ tenants billed directly for energy, landlords must report energy use annually by June 1 and make the data public (Assembly Bill 802).
- Methamphetamine (PDF): If the property was previously contaminated with methamphetamine or fentanyl but has been remediated, the tenant should receive the remediation order (HSC § 25400.28(b)).
- Toxic Mold (PDF): Landlords responsible for property maintenance must notify tenants promptly if mold levels exceed permissible limits (CIV §§ 26141, 26144).
- Arbitration of Disputes: If arbitration is mentioned in the agreement, the following statement must be included and must be typed in 8-point roman boldface type (BPC § 7191):
“NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE BUSINESS AND PROFESSIONS CODE OR OTHER APPLICABLE LAWS. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.” “WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE ‘ARBITRATION OF DISPUTES’ PROVISION TO NEUTRAL ARBITRATION.”
Related Forms
