Last year, the governor of California signed SB 1103 into law. The law expanded the regulatory compliance requirements for commercial property developers.
California commercial real estate developers have long fought an uphill battle to survive the regulatory landscape and statutory mandates.
Repercussions of SB 1103
SB 1103 has been the law in California for approximately 14 months now. As such, properties for multiple tenants that may be considered microenterprises or nonprofits now must provide:
- Detailed disclosure of any operating costs owners pass along to their tenants
- Notification of pending lease terminations and rent increases
- Upon request of tenants, language translation
Some larger properties managed by developers may still not have all their lease agreements updated to reflect the new law. This is problematic.
Make all leasing documents compliant with laws
Some documents that frequently get neglected regarding updates are subletting clauses for tenants. A recent trend of courts ruling that property owners lack reasonableness when rejecting sublet tenants’ applications could apply.
The California Environmental Quality Act (CEQA)
CEQA can cause delays in large developments due to the new stricter standards. Community opposition can also extend environmental review timeframes. It can get overwhelming fast, leaving developers with stalled plans and busted budgets.
Don’t fight uphill battles alone
One of the benefits of having a legal team is to keep your documents updated and in compliance with all laws and regulations. You never want to leave yourself exposed to litigation or unnecessarily increase project delays.
A little time and attention to detail now can save you a great deal of expense and frustration later.