Amended
IN
Senate
May 08, 2024 |
Amended
IN
Senate
April 22, 2024 |
Introduced by Senator Menjivar |
February 13, 2024 |
(4)Existing law regulates the payment or deposit of money to secure a rental agreement for nonresidential property. Existing law, among other requirements, requires a landlord to use the payment or deposit only as reasonably necessary to remedy
tenant defaults in paying rent, to repair damages caused by the tenant, or to clean the premises, if the deposit or money is made for these purposes. Existing law specifies that these requirements are declarative of existing law and therefore operative as to all tenancies, leases, or rental agreements for nonresidential property created or renewed on or after January 1, 1971.
This bill would prohibit a landlord from demanding or receiving payment or deposit from a qualified commercial tenant, as defined, greater than one month’s rent in addition to rent for the first month paid on or before initial occupancy. The bill would delete the provision specifying that these requirements are declarative of existing law.
(5)Existing law prohibits an owner of residential real property from, over the course of any 12-month period, increasing the gross rental rate for a dwelling or a unit more than 5% plus the
percentage change in the cost of living, or 10%, whichever is lower, of the lowest gross rental rate charged for that dwelling or unit at any time during the 12 months before the effective date of the increase, subject to specified conditions.
(4)
(d)Notwithstanding subdivision (b), an owner of commercial real property hired by a qualified commercial tenant giving notice pursuant to this section shall give notice at least 90 days prior to the proposed date of termination if a tenant has occupied the property for three or more years.
(e)
(f)
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(i)
(a)A payment or deposit of money the primary function of which is to secure the performance of a rental agreement for other than residential property or any part of the agreement, other than a payment or deposit, including an advance payment of rent, made to secure the execution of a rental agreement, shall be governed by the provisions of this section. With respect to residential property, the provisions of Section 1950.5 shall prevail.
(b)(1)A landlord shall not demand or receive a payment or deposit of money from a qualified commercial tenant, however denominated, in an amount or value in excess of an amount equal to
one month’s rent, in addition to rent for the first month paid on or before initial occupancy.
(2)This subdivision does not apply to a payment or deposit of money requested by a landlord before January 1, 2025.
(3)For the purposes of this subdivision, the following definitions apply:
(A)“Commercial real property” means all real property in this state, except dwelling units subject to this chapter, mobilehomes as defined in Section 798.3, and recreational vehicles as defined in Section 799.29.
(B)“Microenterprise” has the same meaning as that term is defined in subdivision (a) of Section 18000 of the Business and Professions Code.
(C)“Nonprofit organization” means any private, nonprofit organization that qualifies under Section 501(c)(3) of the United States Internal Revenue Code of 1986.
(D)“Qualified commercial tenant” means a tenant of commercial real property that is a microenterprise, a restaurant with fewer than 25 employees, or a nonprofit organization with fewer than 50 employees. A qualified commercial tenant shall provide a landlord with a self-attestation regarding the number of employees.
(c)The payment or deposit of money shall be held by the landlord for the tenant who is party to the agreement. The claim of a tenant to the payment or deposit shall be prior to the claim of any creditor of the landlord, except a trustee in bankruptcy.
(d)The landlord may claim of the payment or deposit only those amounts as are reasonably necessary to remedy tenant defaults in the payment of rent, to repair damages to the premises caused by the tenant, or to clean the premises upon
termination of the tenancy, if the payment or deposit is made for any or all of those specific purposes.
(1)If the claim of the landlord upon the payment or deposit is only for defaults in the payment of rent and the security deposit equals no more than one month’s rent plus a deposit amount clearly described as the payment of the last month’s rent, then any remaining portion of the payment or deposit shall be returned to the tenant at a time as may be mutually agreed upon by landlord and tenant, but in no event later than 30 days from the date the landlord receives possession of the premises.
(2)If the claim of the landlord upon the payment or deposit is only for defaults in the payment of rent and the security deposit exceeds the amount of one month’s rent plus a deposit amount clearly described as the payment of the last month’s rent, then any remaining portion of the payment or deposit in excess of an amount equal to one month’s rent shall be returned to the tenant no later than two weeks after the date the landlord receives possession of the premises, with the remainder to be returned or accounted for within 30 days from the date the landlord receives possession of the premises.
(3)If the claim of the landlord upon the payment or deposit includes amounts reasonably necessary to repair damages to the premises caused by the tenant or to clean the premises, then any remaining portion of the payment or deposit shall be returned to the tenant at a time as may be mutually agreed upon by landlord and tenant, but in no event later than 30 days from the date the landlord receives possession of the premises.
(e)Upon termination of the landlord’s interest in the unit in question, whether by sale, assignment, death, appointment of receiver or otherwise, the landlord or the landlord’s agent shall, within a reasonable time, do one of the following acts, either of which shall relieve the landlord of further liability with respect to the payment or deposit:
(1)Transfer the portion of the payment or deposit remaining after any lawful deductions made under subdivision (d) to the landlord’s successor in interest, and thereafter notify the tenant by personal delivery or certified mail of the transfer, of any claims made against the payment or deposit, and of the transferee’s name and address. If the notice to the tenant is made by personal delivery, the tenant shall acknowledge receipt of the notice and sign the tenant’s name on the landlord’s copy of the notice.
(2)Return the portion of the payment or deposit remaining after any lawful deductions made under subdivision (d) to the tenant.
(f)Upon receipt of any portion of the payment or deposit under paragraph (1) of subdivision (e), the transferee shall have all of the rights and obligations of a landlord holding the payment or deposit with respect to the payment or deposit.
(g)The bad faith retention by a landlord or transferee of a payment or deposit or any portion thereof, in violation of this section, may subject the landlord or the transferee to damages not to exceed two hundred dollars ($200), in addition to any actual
damages.
(5)The landlord notifies the tenant of the costs, and the costs were incurred within 18 months of the notification.
(6)
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