California Commercial Landlord Disclosures: Required and Recommended

California imposes more disclosure obligations on commercial landlords than most states, driven by its extensive environmental regulations, Proposition 65 (effective 1988), and the SB 1103 requirements for Qualified Commercial Tenants (effective January 1, 2025). Governed primarily by the California Civil Code (effective January 1, 1873), these mandates ensure transparency in property condition and cost allocation. Note that SB 1103 protections are only triggered if the tenant provides the landlord with written notice of their "Qualified Commercial Tenant" status and a self-attestation of their employee count. Understanding these requirements is essential for avoiding liability in the Superior Court of California.

State-Mandated Disclosures

Official Law Citation: The rules and regulations outlined on this page are strictly configured under the official California Proposition 65 - Health and Safety Code § 25249.6Preview unavailable, Civil Code § 1938Preview unavailable, and Health and Safety Code § 25359.7Preview unavailable. Landlords must always ensure their lease agreements directly adhere to these state codes.

1. Proposition 65 Warning (Health and Safety Code § 25249.6)

California's Proposition 65 (Safe Drinking Water and Toxic Enforcement Act) requires businesses to provide "clear and reasonable warning" before knowingly exposing individuals to chemicals known to cause cancer, birth defects, or reproductive harm. Commercial landlords must:

• Post Prop 65 warnings if the property contains listed chemicals (common in older buildings with lead, asbestos, or certain industrial residues) per HSC § 25249.6.
• Ensure tenants who operate businesses open to the public are aware of their own Prop 65 obligations.

2. CASp Disability Access Inspection (Civil Code § 1938)

Commercial landlords must state in every lease whether the property has been inspected by a Certified Access Specialist (CASp).

• If a CASp inspection has occurred, the landlord must provide a copy of the report at least 48 hours before lease execution.
• If no inspection has occurred, the lease must include specific statutory language notifying the tenant of their right to request one (CIV § 1938(e)).
• This disclosure is mandatory for all commercial leases executed on or after January 1, 2017.

3. Hazardous Substance Disclosure (Health and Safety Code § 25359.7)

Any owner of nonresidential real property who knows, or has reasonable cause to believe, that any release of hazardous substance has come to be located on or beneath that real property must, prior to the lease or rental, give written notice of that condition to the lessee. Failure to provide this notice subjects the owner to actual damages and potential civil penalties of up to $5,000 per violation.

4. Asbestos Disclosure (Health and Safety Code § 25915)

If the building was constructed prior to 1979 and contains asbestos-containing materials (ACMs), California regulations under HSC § 25915 require landlords to provide written notice to all tenants and their employees of the presence and location of asbestos within 15 days of receiving a report or obtaining knowledge of its presence.

5. Flood Zone and Natural Hazard Disclosures

Commercial landlords should disclose if the property is in a:

• FEMA-designated flood zone.
• State-designated fire hazard severity zone.
• Dam inundation zone.
• Tsunami hazard zone.

While the formal Natural Hazard Disclosure Statement (NHD) is primarily required for residential sales and certain residential leases, providing comparable information in commercial leases is prudent and may be required by lenders.

SB 1103 Disclosures (Effective January 1, 2025)

For Qualified Commercial Tenants (QCTs)—including microenterprises with ≤5 employees, restaurants with under 10 employees, and nonprofits with under 20 employees—SB 1103 introduces new disclosure requirements. Note: These protections are only triggered if the tenant provides the landlord with written notice of their QCT status and a self-attestation of their employee count (CIV § 1950.9(a)(3)).

Building Operating Cost Transparency (Civil Code § 1950.9)

Landlords cannot charge QCTs fees for building operating costs (OPEX) unless:

• Costs are proportionately allocated based on the tenant's square footage.
• The landlord provides a written estimate of costs for the next 12 months and actual costs for the previous 18 months.
• Documentation is provided at least 48 hours before lease signing or upon annual request.

Lease Translation Requirement (Civil Code § 1632)

Under CIV § 1632, if the lease for a QCT was primarily negotiated in Spanish, Chinese, Tagalog, Vietnamese, or Korean, the landlord must provide a written translation of every term and condition in that language before the tenant signs it. Per CIV § 1632(g), the translation must be accurate but does not need to be prepared by a certified translator. Failure to provide the translation gives the tenant the right to rescind the lease.

Federal Disclosures

ADA Compliance

The Americans with Disabilities Act impacts commercial properties open to the public. While there is no specific "disclosure" requirement, landlords should:

• Clearly allocate ADA compliance responsibility in the lease.
• Disclose any known ADA deficiencies.
• Address who pays for accessibility modifications.

Lead-Based Paint

The federal lead-based paint disclosure rule applies only to residential properties and does not extend to commercial leases. Mixed-use buildings must comply for any residential portions.

Recommended Lease-Based Disclosures

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