California Commercial Lease Review
California puts more statute into commercial leasing than most states. A landlord renting space used as a public accommodation must say in the lease whether a Certified Access Specialist (CASp) has inspected it. Commercial deposits have their own return deadlines, one-sided fee clauses work both ways, and since 2025 very small tenants get added protection on operating cost pass-throughs. A California review should test the lease against each of these rather than treat it as pure freedom of contract.
What does the CASp disclosure change for a California tenant?
Civil Code 1938 requires the lease to state whether the premises have had a CASp inspection. If a report exists, you should receive it before signing; if it arrives less than 48 hours before you sign, you can rescind within 72 hours. Repairs a report identifies are presumed to be the landlord’s job unless the parties agree otherwise. Where no certificate exists, the lease must include statutory wording telling you that you may request an inspection and that the two of you must agree who pays for it and for any repairs. Read that clause closely, because accessibility claims against a business open to the public are common in California.
Which money rules apply to commercial space?
Civil Code 1950.7 limits deductions from a commercial deposit to unpaid rent, tenant damage and cleaning, and generally requires the balance back within 30 days after the landlord regains possession. Bad-faith retention can add up to $200 on top of actual damages.
Civil Code 1717 makes a landlord-only attorney fee clause reciprocal in a contract dispute, and that right cannot be waived. Separately, Civil Code 1950.9 (from SB 1103) limits operating cost charges for qualified commercial tenants: microenterprises, restaurants with fewer than 10 employees and small nonprofits that have given the landlord written notice of their status. Charges must be proportionate and documented, and noncompliance is a defense in an eviction for unpaid costs.
California sources checked 2026-10-09: Cal. Civ. Code § 1938 · Cal. Civ. Code § 1950.7 · Cal. Civ. Code § 1950.9 · Cal. Civ. Code § 1717. Laws change; confirm the current rule before relying on it.
What the review checks for California
If the tenant abandons and the lease ends, the landlord recovers unpaid future rent only to the extent it exceeds the rental loss the tenant proves could reasonably have been avoided, so the burden of showing a failure to mitigate sits with the tenant. But if the lease expressly provides for it and allows subletting or assignment, the landlord may instead keep the lease alive and collect rent as it falls due (Civ. Code § 1951.4), which largely removes the pressure to re-let.
Frequently asked questions
Do I qualify for the SB 1103 operating cost protections in California?
Only if you are a microenterprise, a restaurant with fewer than 10 employees or a 501(c)(3) nonprofit with fewer than 20 employees, and you have given the landlord written notice of that status with a self-attestation of headcount. For a lease, that notice is due before or upon signing and then annually. Without the notice, the section does not protect you.
Must a California landlord return my commercial deposit within a set time?
Yes. Under Civil Code 1950.7 the landlord may keep only what is reasonably needed for unpaid rent, damage you caused and cleaning, and must return the rest within 30 days of getting the space back in most cases. If the claim is only for rent and the deposit exceeds one month plus a labeled last month, the excess is due within two weeks.
Signing a commercial lease in California?
Upload the lease and any guaranty. Every page is read, rent and escalations are totalled over the term, and each risky clause is explained in plain English with what to ask the landlord for.
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General information, not legal advice, and not reviewed by an attorney. Confirm with a California attorney before relying on it.