Los Angeles has some of the strongest renter protections in the nation for residents. But California law limits the kinds of protections the city can enact for businesses that rent. This means landlords of commercial properties may deliver substantial rent increases with little to no notice, which in turn encourages self-eviction for businesses already stretched thin by high operating costs and market fluctuations.

Understanding SB1103, the Commercial Tenant Protection Act

SB1103, or the Commercial Tenant Protection Act offers some protections for California’s commercial tenants. The law applies to small businesses that rent and meet one of these qualifications:

• Commercial enterprises with five or fewer employees
• Restaurants with 10 or fewer employees
• Nonprofit organizations with 20 or fewer employees

Commercial tenants must certify their qualified status in writing with their landlords in order for the following protections to take effect:

• The right to negotiate the terms of a lease in six languages: English, Spanish, Chinese, Tagalog, Vietnamese, and Korean
• Rent increase notice requirements
  • An increase of less than 10%: 30-day written notice
  • An increase of 10% or more: 90-day written notice
• Termination notice requirements
  • For tenants with less than one year of tenancy: 30-day written notice
  • For tenants with one year of tenancy or more: 60-day written notice
• Standard requirements around additional fees for building operations, sometimes called Common Area Maintenance (CAM)
  • Landlords must provide commercial tenants with documentation to justify the cost of any CAM, including a dated and itemized quote, contract, receipt or invoice for repairs/rehabilitation work needed.
  • Landlords must work with a licensed contractor or service provider, and provide commercial tenants with a tabulation detailing cost-sharing amongst tenants AND a signed and dated attestation form affirming that the documentation and costs are true and correct.

Join the SAJE Small Business Alliance

We created the Small Business Alliance (SBA) as a space for storytelling, organizing, leadership development, and collective problem-solving among small business owners. The SBA grew out of our know-your-rights canvassing and outreach efforts in South Central Los Angeles, and over time, it has become a trusted space where small businesses owners who are commercial tenants discuss the challenges they face, including rising rents, harassment, displacement pressures, and the lack of commercial tenant protections.

The SBA focuses on three key objectives:

1. Advocating for stronger commercial tenant protections by developing and leading strategic campaigns that advance meaningful safeguards for commercial tenants who own small businesses.
2. Building  self-confidence and strengthening leadership skills among small business owners through targeted training that increases their understanding of and access to city resources.
3. Providing technical assistance and resource navigation to small business owners. This includes support with business permit renewals, compliance requirements, and connections to trusted legal service providers. 

For more information, or to join the Small Business Alliance, contact Karen Ramirez, SAJE program manager, at (213) 245-8161 or karamirez@saje.net.