California Commercial Maintenance: Landlord & Tenant Duties

In California, commercial maintenance obligations are primarily governed by the California Civil Code (originally enacted March 21, 1872, effective January 1, 1873). Unlike residential tenancies, where the law implies a warranty of habitability, commercial maintenance is entirely governed by the lease agreement. However, since January 1, 2025, SB 1103 has introduced significant transparency requirements for Common Area Maintenance (CAM) charges, particularly for small "Qualified Commercial Tenants" (QCTs).

"As Is Default"

Official Law Citation: The rules and regulations outlined on this page are strictly configured under the official California Civil Code § 1925 et seq.Preview unavailable. Landlords must always ensure their lease agreements directly adhere to this state code and the transparency mandates of SB 1103.

Under California law, if the lease does not specify otherwise, the commercial tenant is presumed to have accepted the premises "as is" and assumes responsibility for maintenance. This makes explicit lease language on maintenance allocation critically important.

Maintenance by Lease Type

Landlord Obligations That Cannot Be Disclaimed

While maintenance is primarily governed by the lease, California law imposes specific statutory requirements and disclosure obligations that must be addressed:

Building Code Compliance

In California commercial leases, parties may contractually shift the burden of compliance with government-ordered repairs (including building codes and structural safety) to the tenant (Brown v. Green, 8 Cal. 4th 812). If the lease is ambiguous, courts apply a six-factor test to determine responsibility: (a) cost of repair vs. rent, (b) lease term, (c) relationship of benefit to the parties, (d) whether the repair is structural/non-structural, (e) degree of interference with tenant's use, and (f) likelihood the parties contemplated the law.

ADA Compliance

The ADA requires that commercial properties open to the public be accessible. The lease should allocate responsibility, but the landlord retains underlying liability as the property owner. Common approaches:

• Landlord handles common areas - lobbies, elevators, parking, restrooms.
• Tenant handles their leased space - ensuring accessibility for their customers and employees.

Furthermore, under Civil Code § 1938, every commercial lease executed on or after July 1, 2013, must state whether the premises have been inspected by a Certified Access Specialist (CASp). If a CASp report exists and indicates the property does not meet standards, the landlord must provide the report to the tenant at least 48 hours prior to lease execution. Failure to provide the report gives the tenant a 72-hour right of rescission after signing.

Seismic Retrofit

California requires certain older buildings (particularly unreinforced masonry buildings pre-dating 1978) to undergo seismic retrofitting. The cost allocation should be addressed in the lease. If not:

• Local ordinances typically place the obligation on the building owner.
• Landlords may attempt to pass costs through as capital improvement amortization in NNN leases.

Fire and Life Safety

The landlord is generally responsible for maintaining fire alarm systems, sprinkler systems, emergency exits, and other life safety equipment in common areas and the building shell.

Typical Tenant Maintenance Obligations

Interior Maintenance

• Keeping the premises clean and in compliance with health regulations.
• Interior painting, flooring, and fixture maintenance.
• Plumbing and electrical repairs within the demised premises.

HVAC Maintenance

NNN leases almost always require tenants to maintain a preventive maintenance contract with a licensed HVAC contractor. Many leases require proof of this contract upon execution.

Trade Fixtures

Tenants are responsible for maintaining all equipment they install (commercial ovens, coolers, manufacturing equipment, racking, etc.).

CAM Charges and Reconciliation

In NNN and modified gross leases, the landlord maintains common areas and passes costs through as CAM charges. The lease should specify:

• What expenses are included in CAM.
• Whether there is a CAM cap.
• The reconciliation process (typically annual).
• Audit rights for the tenant.

Effective January 1, 2025, SB 1103 (Civ. Code § 1950.9) mandates strict CAM transparency for Qualified Commercial Tenants (QCTs). A QCT is defined as a microenterprise (≤5 employees), a restaurant (<10 employees), or a nonprofit (<20 employees). For these tenants, landlords cannot charge building operating costs unless: (a) costs are allocated proportionately (e.g., by square footage), (b) the tenant is provided an itemized list of expenses with supporting documentation (contracts, receipts), and (c) the landlord provides a signed, dated attestation that costs are true and correct. QCTs have an automatic statutory right to inspect supporting documentation upon 30 days' notice.

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