4 California Laws that Commercial Real Estate Owners Need to Know

If you’re looking to own commercial real estate, you picked the right place. The current California real estate laws are good news for you and your investments. That means now is a good time to start investing.

But before you start investing, you should know about these laws so you don’t do anything to violate them.

4 California Laws that Commercial Real Estate Owners Need to Know

Here, we’re breaking down a few essential California laws you need to know.

EPA Benchmarking Data Disclosure

Assembly Bill 802 is a replacement of AB 1103 (passed in 2009). Under AB 802, the Energy Use Disclosure for nonresidential buildings is repealed. Now, the current owner of a nonresidential building is not required to disclose benchmarking data under the EPA’s Energy Star Portfolio Manager to prospective buyers, tenants, or lenders.

This means two things for owners:

  1. Each utility must provide its usage information to the building owner.
  2. Gas and electric companies are permitted to offer incentives to increase energy efficiency. For those who are looking for green development, this law is your friend.

Required Landlord Disclosure

There are a few California lease laws specifically related to landlords. For example, under California law, landlords are required to disclose certain information about their building to the tenants who lease from them including:

  • Online availability of sex offender registry information
  • Whether their utilities serve other areas
  • How utility costs are fairly allocated
  • Written disclosure of whether the landlord knows of toxic mold
  • Notice of intent to demolish a unit
  • Any pest control disclosure the landlord has received
  • Non-smoking policy
  • Known locations of former federal or state ordnance

Usually, these disclosures must be included in the language of the lease that tenants sign.

Continuing Education for Brokers and Salespersons

The law requires that real estate brokers and salespersons complete a three-hour course covering the management of offices and supervision of licensed activities. This is part of the broker’s 45 hours of continuing education required to renew their broker license every four years. All brokers renewing their license for the first time after January 1, 2016, are required to abide by this law.

There’s an eight-hour update course for renewal of salesperson and broker licenses. These include traditional topics like risk management and ethics but will now also include management and supervision.

Sublease Restrictions

There is the question of subletting or renting to another individual (not the original tenant on the lease) for the duration of the lease. This is an issue most commercial real estate owners will encounter.

In California, if the lease agreement requires the tenant to get approval from the landlord before subletting, then the landlord must have a valid reason to withhold consent.

 

Our talented attorneys can guide you through all stages of the process. If you need a lawyer, reach out to us today through our contact page or call Lisa Wills at (925) 463-9000.

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