What California Commercial Landlords Need to Know About the Commercial Tenant Protection Act
- MichellePattersonLaw
- Feb 24
- 3 min read
The Commercial Tenant Protection Act (CTPA) was signed by Governor Newsom to extend tenant protections to commercial tenants in California, which took effect on January 1, 2025. What does this mean for Commercial Landlords?
Qualified Commercial Tenants
To start, the protections under the CTPA apply to “Qualified Commercial Tenants” only.
A “Qualified Commercial Tenant” is a commercial tenant that meets both of the following requirements:
(i) The tenant is a microenterprise (such as a sole proprietorship or partnership, or a small LLC or corporation), a restaurant with fewer than 10 employees, or a nonprofit organization with fewer than 20 employees; and
(ii) Most importantly, the tenant has provided the landlord a written notice that the tenant is a qualified commercial tenant with a self-attestation regarding the number of its employees, before execution of the lease, and annually.
New Protections for Commercial Tenants
The CTPA extends protections to qualified commercial tenants in the areas of: 1) rental increases; 2) translation requirements for non-English speaking tenants; 3) termination notices; and 4) operating costs billed to tenants.
1) Notice Period for Rental Increases
A notice of rental increase must be served to the tenant at least 30 days before the effective date of the increase, if the increase is 10 percent or less than the rate charged to the tenant during the 12 months before the effective date of the increase. If the increase is more than 10 percent, the notice shall be served at least 90 days before the effective date of the increase.
2) Translation Requirements for Lease Agreements
For non-English speaking tenants, lease agreements negotiated in Spanish, Chinese, Tagalog, Vietnamese, or Korean, must be translated in the language in which it was negotiated. A violation of this Act allows the tenant to rescind the lease agreement, even if the tenant negotiated the lease through their own interpreter.
3) Notice of Termination
A notice to terminate the tenancy shall be served to the tenant at least 60 days prior to the proposed termination date, if the tenant occupied the premises for more than one (1) year; or 30 days, if the tenant occupied the premises for less than one (1) year.
4) Operating Costs Billed to the Tenant
Building Operating Costs shall not be charged to the tenant unless all of the following conditions are met:
a) The costs are allocated proportionately per tenant, by square footage, or another method as substantiated through supporting documentation provided by the landlord to the qualified commercial tenant.
b) The costs have been incurred within the previous 18 months, or are reasonably expected to be incurred within the next 12 months.
c) Before the execution of the lease, the landlord provides the prospective tenant a notice stating that the tenant may inspect any supporting documentation of building operating costs upon 30 days’ written request from the tenant.
d) Within 30 days of a written request, the landlord provides the tenant supporting documentation of the previously incurred or reasonably expected building operating costs.
e) The costs do not include expenses paid by the tenant directly to a third party.
f) The costs do not include expenses for which a third party, tenant, or insurance reimbursed the landlord.
Affirmative Defense in Unlawful Detainer Action
In an action to recover possession (such as an unlawful detainer or ejectment) based on a failure to pay a fee to recover building operating costs, a qualified commercial tenant may raise violations of provisions of the CTPA as an affirmative defense, allowing the tenant to recover damages and attorney’s fees, if the commercial landlord is found liable.
The CTPA Protections Cannot be Waived by the Tenant
Finally, these protections are not waivable.
If you are a commercial landlord or tenant and believe that the provisions of the Commercial Tenant Protection Act may impact your lease agreement, contact this office to schedule a consultation.
Michelle Patterson Law
p: (619) 314-0606
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