California Commercial Lease Laws: Complete Guide for Property Owners

California's commercial lease legal environment has undergone significant changes with the enactment of SB 1103 (Commercial Tenant Protection Act) and AB 2347, both effective January 1, 2025. These laws introduce new protections for small commercial tenants while maintaining California's broadly contract-driven approach to commercial leasing.

Key California Commercial Lease Laws at a Glance

Official Law Citation: The rules and regulations outlined on this page are strictly configured under the official California Civil Code § 1950.7 - Commercial Security Depositsไม่มีตัวอย่าง. Landlords must always ensure their lease agreements directly adhere to this state code.

SB 1103: Qualified Commercial Tenants (QCTs)

Starting January 1, 2025, certain small commercial tenants qualify for enhanced protections under SB 1103. A tenant qualifies as a Qualified Commercial Tenant (QCT) if they are:

• A microenterprise - 5 or fewer employees, including the owner
• A restaurant - fewer than 10 employees
• A nonprofit - fewer than 20 employees

QCTs must provide written self-attestation of their status upon lease execution and annually thereafter. Protections include enhanced notice requirements for rent increases and lease terminations, required lease translations, automatic lease renewals, and restrictions on operating cost charges.

For more detail, see our Commercial Rent Increasesไม่มีตัวอย่าง and Commercial Lease Requirementsไม่มีตัวอย่าง guides.

Common Lease Structures

Gross (Full-Service) Lease

Common in Class A office buildings. Landlord includes most operating expenses in the rent.

Modified Gross Lease

Tenant pays a portion of operating expenses (often utilities and janitorial). Common in multi-tenant office and light industrial spaces.

Triple Net (NNN) Lease

Tenant pays base rent plus property taxes, insurance, and CAM charges. Standard for retail, industrial, and single-tenant properties.

Percentage Lease

Base rent plus a percentage of gross revenue. Common in shopping centers.

Security Deposits

California Civil Code § 1950.7 governs commercial security deposits. There is no statutory cap on the deposit amount, and landlords must return the deposit within 30 days of receiving possession. Unlike residential deposits, commercial deposits do not require interest payments or itemized deduction statements (unless the lease requires it).

For more detail, see our Commercial Security Depositsไม่มีตัวอย่าง deep dive.

Eviction Process

California uses the unlawful detainer process for commercial evictions. As of 2025, tenants now have 10 business days (up from 5) to respond to an unlawful detainer complaint. Self-help evictions are strictly prohibited.

For more detail, see our Commercial Eviction Processไม่มีตัวอย่าง guide.

Maintenance and Repairs

There is no implied warranty of habitability for commercial properties. Maintenance is entirely governed by the lease. NNN tenants bear most responsibilities; gross lease landlords handle the majority.

For more detail, see our Commercial Maintenance Obligationsไม่มีตัวอย่าง guide.

Getting Started with Compliance

California's rapidly evolving commercial tenant protections - especially the SB 1103 QCT framework - make compliance management more complex than ever. Landager helps commercial landlords track QCT certifications, manage notice periods, and stay compliant with California's unique regulatory legal environment.

Explore more California commercial compliance topics:

• Commercial Security Depositsไม่มีตัวอย่าง
• Commercial Eviction Processไม่มีตัวอย่าง
• Commercial Required Disclosuresไม่มีตัวอย่าง
• Commercial Rent Increasesไม่มีตัวอย่าง
• Commercial Lease Requirementsไม่มีตัวอย่าง
• Commercial Maintenance Obligationsไม่มีตัวอย่าง
• Commercial Late Feesไม่มีตัวอย่าง