California Assembly Bill 2093 Impact on all New California Commercial Leases

California Assembly Bill 2093

We hope you had a wonderful holiday season and a happy New Year. As we begin 2017, we wanted to bring to your attention California Assembly Bill 2093 (the “Bill”) which impacts all new California commercial leases beginning on or after January 1, 2017. Whether a lease is a commercial lease can require a detailed analysis, but if the lease relates to property used as a residential/personal dwelling unit, it is likely not a commercial lease. If you need assistance in determining whether your lease qualifies as a commercial lease, please do not hesitate to contact us.

The Bill expands a commercial property owner’s, or lessor of commercial property (collectively the “Landlord”), disclosure requirements under California Civil Code Section 1938. The Bill mandates that all new commercial leases entered into on or after January 1, 2017, include specific language regarding premises compliance with state construction and accessibility laws. Please contact us to ensure any new leases contain the required language.

This Bill also restricts a Landlord from denying a prospective tenant the right to obtain a Certified Access Specialist (“CASp”) report on the underlying premises’ compliance with state construction and accessibility laws before executing their lease. In addition, any costs to remedy any violations mentioned in the CASp report are presumed the responsibility of the Landlord. The parties to the lease may, however, mutually agree upon a cost sharing arrangement for the applicable expenses. You can avoid this presumption and any ambiguities therein with proper drafting.

In addition, a Landlord who has a CASp report must provide the prospective tenant a copy of such report at least forty-eight (48) hours before the tenant executes their lease. The failure to provide this report in the required timeframe may allow a new tenant to rescind their recently executed lease based upon the content of the CASp report. The tenant, however, must inform the Landlord of their rescission within seventy-two (72) hours after executing their lease.

If the premises received a CASp report indicating its compliance with all applicable standards, the Landlord must provide the tenant with a copy of the current disability inspection certificate and any inspection report to the extent not already provided to the tenant within seven (7) days after the lease execution.

The above is a short summary of the Bill’s new requirements, all of which are easily accommodated with advanced planning and proper drafting. Understanding the impact of this new law can help during the lease negotiating process and with shifting any applicable costs related thereto onto the other party. We are happy to discuss any concerns you may have regarding this new law. Please feel free to contact us with any questions. We look forward to hearing from you.