Governor Newsom signed SB 1103 on September 30, 2024, after Public Counsel and a coalition of nonprofits surveyed the small businesses they work with across California and found that 86% of respondents had already watched small businesses get displaced from their own storefronts.[1] State Senator Caroline Menjivar, the bill’s author, pitched it as protection for the operators who “increase the walkability and cultural representation” of a business corridor, restaurants, nonprofits, five-person shops, the kind of tenants who rarely have a real estate lawyer on call when a landlord’s rent notice shows up.[1][2]
The law that resulted, the Commercial Tenant Protection Act, took effect January 1, 2025. It’s a real set of rights: 30 to 90 days’ notice before a rent increase, depending on size, 30 to 60 days before a month-to-month tenancy gets terminated, itemized backup for any operating cost charged through to the tenant, and a lease in the tenant’s own language if the deal was negotiated in Spanish, Chinese, Tagalog, Vietnamese, or Korean.[3][4] None of that is automatic, and none of it turns on how small the business actually is.
SB 1103 protects “qualified commercial tenants.” A restaurant with eight employees is not one of those until it says so in writing, and the statute doesn’t care how obviously it would have qualified.
The filing has to go out before the lease is signed, then again every year. Civil Code section 827(b)(7)(D) defines a qualified commercial tenant as one that has given the landlord written notice of its status and a self-attestation of its employee count “before or upon execution of the lease, and annually thereafter,” for any tenancy longer than a month.[3] A tenant that signs the lease and looks into its rights later, which describes most small businesses more accurately than the reverse, has already missed the point the statute starts counting from. There’s no cure provision that lets a tenant backdate the notice once the ink is dry.
The landlord has no duty to ask. Firms advising landlords on compliance have pointed to the same gap: “there is no express requirement in the legislation requiring the landlord to make an inquiry of the tenant."[5] The tenant carries the entire burden: knowing the law exists, filing the notice correctly, renewing it on the anniversary, against a counterparty that has no statutory reason to bring it up and, when rent is going up, a fairly obvious reason not to. It runs the same way a CAM audit window does: the clock doesn’t pause for a tenant who hasn’t noticed it’s running.
The penalties are real, but they only reach tenants who filed. A landlord who violates the operating-cost documentation rules owes the tenant actual damages and, at the court’s discretion, attorney’s fees, plus treble damages and punitives on a showing of willfulness, oppression, fraud, or malice.[3][6] That’s serious exposure, except that it runs to a “qualified commercial tenant,” a status the statute builds around the paperwork, not the payroll. A five-employee microenterprise that never attested is legally indistinguishable, for purposes of this law, from a national chain leasing the unit next door. The landlord who skips the 90-day notice hasn’t broken anything with respect to a tenant that would have qualified, if the filing existed.
None of this is a drafting failure so much as a structural one. A law built to reach the businesses least likely to have counsel runs on a compliance step a lawyer is the one most likely to know to take.
Tracking a status that lives outside the lease#
For a landlord’s counsel handling a California portfolio, SB 1103 isn’t a clause to negotiate into or out of a lease. It’s a status that has to be tracked outside the document itself, against a filing window that closes before signature and reopens, silently, every twelve months. Acrebase’s clause library and negotiation playbook can route SB 1103 language into the execution checklist automatically for any California nonresidential lease where the tenant profile, entity type, headcount, use, looks like it could qualify, so the self-attestation gets requested before the lease goes out rather than discovered missing after a dispute starts. Its AI, trained on prior negotiations, can also flag a lease where the stated employee count or business type suggests SB 1103 eligibility even though no attestation was ever filed, the kind of gap that’s easy to miss reading one lease and hard to miss reading a portfolio.
The practical takeaway: if you’re a tenant who might qualify, put the self-attestation in writing before you sign, not after, and calendar the renewal for the same date every year, the statute gives you no grace period on either deadline. If you’re a landlord, decide now whether you’re going to prompt tenants about their status or wait for them to file, because the law doesn’t require the first option, and choosing the second one is legal but leaves you defending a technical compliance record instead of a good-faith one.
Footnotes
[1] Public Counsel, “California Senate Bill Aims to Strengthen Tenant Protections, Shielding Small Businesses & Nonprofits from Community Displacement” — survey of nonprofits found 86% of respondents reported small businesses facing displacement; quotes from Ritu Mahajan Estes (Public Counsel) and Doug Smith (Inclusive Action). https://publiccounsel.org/press-releases/california-senate-bill-aims-to-strengthen-tenant-protections-shielding-small-businesses-nonprofits-from-community-displacement/
[2] Office of State Senator Caroline Menjivar, “SB 1103 Increasing Common Sense Commercial Tenant Protections, Signed!” — signed September 30, 2024; Senator Menjivar’s statement on small business storefronts and neighborhood walkability. https://sd20.senate.ca.gov/news/sb-1103-increasing-common-sense-commercial-tenant-protections-signed
[3] California Civil Code §§ 827, 1946.1, 1950.9, 1632, as amended by SB 1103 (2023-2024 Regular Session) — definition of “qualified commercial tenant” and self-attestation timing at § 827(b)(7)(D); rent-increase notice periods at § 827(b)(2)-(3); month-to-month termination notice at § 1946.1(b)-(c); operating cost documentation and remedies at § 1950.9; translation and rescission rights at § 1632(b)(8), (k)(2). https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240SB1103
[4] Holland & Knight, “New Changes to California Commercial Leasing Requirements in 2025” — summary of qualified commercial tenant categories, notice, translation, and operating cost transparency requirements effective January 1, 2025. https://www.hklaw.com/en/insights/publications/2025/01/new-changes-to-california-commercial-leasing
[5] Crosbie Gliner Schiffman Southard & Swanson LLP, “The California Commercial Tenant Protection Act Creates a New Category of Protected Commercial Tenants” — “there is no express requirement in the legislation requiring the landlord to make an inquiry of the tenant.” https://www.cgs3.com/the-california-commercial-tenant-protection-act-creates-a-new-category-of-protected-commercial-tenants/
[6] California Lawyers Association, “New Protections for Qualified Commercial Tenants under CA SB 1103” — remedies for operating cost violations under Civil Code § 1950.9(e): actual damages, attorney’s fees and costs, and treble damages plus punitive damages on a showing of willfulness, oppression, fraud, or malice. https://calawyers.org/real-property-law/new-protections-for-qualified-commercial-tenants-under-ca-sb-1103/
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