Commercial landlord-tenant laws are a mix of property law, contract law, and other common law and statutory jurisprudence. These laws outline the landlord’s and business tenants’ rights and responsibilities. Landlords have the right to collect rent as long as their obligations as landlords are met. The pandemic changed the rules in some regions. This post will touch on several important areas, including the lease agreement, the parties, deposits, repairs, discrimination and fair-housing laws, lease assignments, and termination.
Important Events in Commercial Landlord-Tenant Law
The following events are likely to lead to disputes. If they arise and you suspect that they will lead to litigation, it is important to speak to an attorney. This will often save you from costly mistakes and wasted time.
-Breach of Lease
-Missed rent Payment
-Disputes over maintenance/repair costs
-Property or fixture damages
If any of the above events do cause friction between the landlord and tenant, be aware of the mechanisms available for resolving disputes between landlords and tenants, such as mediation, arbitration, or legal proceedings. Before executing the lease agreement, measure your tolerance for alternative dispute resolution mechanisms and the cost of court and estimate how likely disputes might be based on the type of business being operated.
Subleasing and Assignments
Understand the rules and restrictions concerning subleasing or assigning the lease to another party, as these activities may have specific requirements or require landlord approval. Legal regulations are generally generous when it comes to assignments and subleases, and California law generally expects that landlords will not withhold consent without a valid reason.
Insurance for Landlords and Tenants
It goes without saying that insurance can help prevent disputes. Many lease agreements require one or both parties to maintain insurance policies that cover general liability and specific issues. A good lease agreement will specify the insurance obligations for both landlords and tenants, including liability coverage, property insurance, and any additional requirements specific to the jurisdiction.
Health and Safety Codes
Aside from what is required in the lease agreement, you should familiarize yourself with applicable health and safety regulations, including building codes, fire safety requirements, and other relevant standards to ensure the property meets the necessary standards. Before entering the agreement, consulting counsel is recommended, particularly if industrial uses like manufacturing are being contemplated.
Privacy Rights Under State Law
It is important to know the rights afforded to tenants, such as privacy protections, access to essential services, the right to quiet enjoyment of the property, and restrictions on landlord entry without proper notice. This is particularly true where trade secrets are important for a business’s success and corporate espionage is a concern.
Discrimination and Fair-housing laws
Commercial properties are treated differently than housing properties in many jurisdictions. The Americans with Disabilities Act (ADA) and the Civil Rights Act of 1964, two important pieces of federal legislation both apply. Many fair-housing laws do not apply unless of course, the business is housing. Still, we do not recommend falling afoul of the spirit of those laws or engaging in discrimination of any kind, even if it is not unlawful.
Recent Trends in Commercial Landlord-Tenant Law
In response to the COVID-19 pandemic, many jurisdictions implemented temporary eviction moratoriums to protect commercial tenants from eviction due to financial hardships. These measures aimed to provide relief during times of economic uncertainty. As a possible recession has been discussed, some governments and organizations have looked towards implementing or extending rent relief and assistance programs to help commercial tenants facing financial difficulties. These programs may provide financial aid or offer rental assistance to eligible businesses.
The Environment and Privacy
Some commercial landlord-tenant laws are increasingly focusing on promoting sustainability and energy efficiency in buildings. This includes requirements for energy audits, green building certifications, or obligations to disclose energy consumption information to tenants. Given the increasing reliance on technology and data in commercial spaces, there is a heightened focus on data protection and privacy. Laws and regulations related to data security, customer information, and cybersecurity measures may impact commercial landlord-tenant relationships.
Preventing and Dealing Effectively with Disputes
Differences of opinion are inevitable, but litigation is not. We hope to help you avoid expensive and distracting litigation while protecting your rights and financial interests. At the same time, if someone is threatening you with litigation, we will defend you with determined negotiation and effective litigation tactics. Our knowledgeable attorneys have counseled many clients who have had commercial Landlord-Tenant issues.
If you find yourself or your business confronted with these issues, we are happy to answer your questions and provide legal advice. We will step up and get involved to protect you from threats to your property rights. Call the trusted attorneys at Lowthorp Richards at (805) 981-8555 or fill out our online contact form. We operate primarily in the Tri-Counties area – Ventura, Santa Barbara, and San Luis Obispo.