California Commercial Tenant/Landlord Rights
- Tenant improvement refers to any type of improvements made by the tenant to the building. Both tenant and landlord work together on tenant improvements, as many improvements require a landlord's assistance to complete. The specific work is detailed in the lease agreement with explanations and diagrams. A landlord has the right to all improvements attached to the building with the exception of trade fixtures. A tenant removing a particular improvement considered part of the building can be sued by the landlord.
- The landlord provides repair responsibility in the commercial tenant rental agreement. Utilities, exterior walls and the roof are typically the responsibility of the landlord, unless otherwise stated. California does not require a landlord to provide a deadline for requested tenant repairs---it only requires the landlord to start repairs within 30 days of notification. The landlord does not have any liability in the event that damage to the building makes doing business inconvenient. To make it even more difficult for commercial tenants, unless the lease states otherwise the tenant is unable to make the repairs himself.
- Rent abatement is not a required clause in a commercial rental agreement. It is a period of free rent at the beginning of the rental agreement, or during specified months. Its purpose is to either provide an incentive to move the business into the property, or to provide relief during slow business months.
- Unlike a residential rental agreement, any tenant rights and protections for commercial leases are contained in the lease. For this reason, commercial tenants often have real estate agents or lawyers review their leases and negotiate clauses. Establishing periods of rent abatement, setting down repair responsibility, or dispute arbitration are points that can be negotiated. This is the one area that a commercial tenant has some power, since he can always take his business to another commercial landlord.
- Commercial tenants experience a different eviction process than residential tenants, and it generally favors the landlord over the tenant. Nonpayment of rent is a normal cause for evictions in both commercial and residential rental agreements. What makes the commercial nonpayment evictions different is that a landlord can increase the rent owed by 20 percent over the actual owed rent, and the inaccurate numbers will not get the case dismissed.
A commercial tenant does get longer notice periods in order to fix a lease violation or leave the building. A three-day notice is used for residential tenants, while a commercial tenant can get up to 10 days. This is a point negotiated in the lease agreement, so it is possible the notice period is shorter, depending on the landlord.
The biggest way that a commercial eviction varies from a residential eviction is that the landlord can get a money judgment for the rent owed over the entire lease agreement, not just what is due currently. Commercial leases often run longer than residential leases, so the monetary damages can be monumental.