Security Deposits Would be Limited Under New Bill

State Senator Menjivar recently introduced a new bill that would add new requirements and limit security deposits for landlords renting to small businesses and non-profits. Effectively, this would impose a rent control policy for commercial real estate. 

Senate Bill 1103: Explained

For landlords renting to small businesses of 25 employees or less or to non-profits with no more than 50 employees, it would:

• Restrict security deposits to no more than one month's rent. 
• For tenants who have occupied the space for three or more years, a 90-day notice is required before lease termination or rent increases. 
• Require translation services for the lease agreement.

The bill introduces residential rental conditions to commercial lease agreements. And because the senator may further amend the bill, we may even see more outright rent control provisions added. 

The Status of the Bill

The bill in its current form is a spot bill. It's not in its final form. 

The senator has until the middle of this month to insert the final language.

In other words, the senator could add more conditions to the bill.

As it stands now, however, it is bad enough for our industry. 

It represents a new front of interference in how our members conduct business. 

Our lobbyist is hard at work getting allies to oppose the measure. Additionally, he is doing what he can to meet with the author and make changes to it. 

In the meantime, we should prepare to fight this measure. If you wish to contact Senator Menjivar's office to express your concerns, you can contact the office here. 

Remain respectful in tone and focus on the negative impacts this would have on your ability to lease to small businesses and non-profits. 

This bill is the wrong way to help small businesses keep their stores.