Commercial Tenant Protection Act took effect this week, and California landlords may lose millions of dollars due to new protections of small businesses.  Introducing the new Commercial Tenant Protection Act—a game-changer for your business. But beware, this groundbreaking legislation brings with it a host of challenges that could affect your bottom line.

Substantial Financial Burden

This new law demands significant investments from landlords, including pricey translation services (estimated at $10,000), lease adjustments, and compliance with new notice requirements. These expenses could skyrocket your operating costs, squeezing your profit margins.

Escalating Vacancy Rates

Already struggling with historic office vacancy rates? The new regulations could worsen the situation. The added administrative burden could lead to fewer rentable spaces and higher rents, counterintuitively harming the very small businesses and nonprofits the law seeks to protect.

Strained Flexibility

Under the new law, you'll need to provide tenants with 90 days' notice for rent increases over 10% and 60 days for lease terminations. This restricts your ability to respond to market changes, potentially causing financial instability and limiting opportunities to recoup investments.

Limited Cost Recovery

The Act restricts landlords from passing on a variety of operating expenses to tenants, including emergency repairs, insurance premium hikes, property tax increases, and major capital improvements. These unpredictable costs can strain your resources and make it difficult to maintain properties effectively.

Mandatory Translations

Leases negotiated in languages other than English now require translations covering all key terms. Not only is this an added expense, but errors in translation could lead to costly legal disputes and potential vacancies.

Act Now to Stay Ahead!

Understand these new requirements, seek expert advice, and navigate these changes proactively. Stay informed, protect your investments, and continue supporting small businesses within the new legislative landscape.

Give us a call for an evaluation of your retail and/or office property.  Frank (310) 503-4158, Viktorie (424) 301-0075.