Knowing your role is half the game. Your tenant rep negotiates the business deal. Your attorney reads the legal language. Your CPA checks the numbers. And you, the business owner, bring the one thing nobody else can: the proof that your business is worth betting on.
These four questions cover the rules that protect you in California and the preparation that gets you approved.
Question 36 of 50
What is SB 1103 and does it protect my business?
Short answer: SB 1103, California’s Commercial Tenant Protection Act, took effect January 1, 2025. It gives qualified commercial tenants (certain microenterprises with five or fewer employees, restaurants with fewer than 10 employees, and nonprofits with fewer than 20 employees) rights around operating cost charges, rent increase notices, lease translation, and termination notices. You must notify the landlord in writing that you qualify.
Key protections for qualified tenants include:
- Operating costs: Charges must be allocated proportionately and backed by documentation, which the landlord must provide within 30 days of a written request.
- Rent increase notice: At least 30 days’ written notice for increases of 10 percent or less and 90 days’ for larger increases, counting all increases in the prior 12 months.
- Translation: Leases negotiated primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean must be provided in that language.
- Termination notice: Longer notice periods before a landlord ends a month-to-month tenancy.
To claim these rights, you generally must give the landlord written notice and a self-attestation of your employee count before or when you sign, and again each year. Our full guide, SB 1103 Explained, covers who qualifies, a sample notice, and what counts as supporting documentation. This is general information, not legal advice.
Question 37 of 50
Should I have an attorney review my commercial lease?
Short answer: Yes. A real estate attorney reviews the legal language, liability, indemnity, default, and guarantee provisions. A tenant representative negotiates the business terms like rent, concessions, and space. The two roles work together, and having both is the strongest protection for a business owner signing a multi-year commitment.
The most efficient order: negotiate the business terms first through the LOI, then send the drafted lease to your attorney. That way you’re paying legal fees to review a deal that already makes business sense, rather than paying to negotiate rent by email.
Question 38 of 50
What financial documents will a landlord ask for?
Short answer: Landlords commonly ask for two to three years of business tax returns, current profit and loss statements and balance sheets, recent bank statements, personal financial statements and tax returns from owners, a credit report authorization, and a business plan with projections for newer businesses.
Have these ready before you tour so you can move fast when the right space appears:
- Business tax returns (2 to 3 years)
- Year-to-date P&L and balance sheet
- 3 to 6 months of business bank statements
- Personal financial statement for each guarantor
- Business plan and projections (required for startups)
- Owner resume or industry experience summary
- Proof of funding for buildout (SBA pre-approval, investor letter, or bank statements)
A complete, organized package signals you’re a serious tenant, and that’s leverage.
Question 39 of 50
Can I lease commercial space as a new business with no history?
Short answer: Yes. Landlords lease to startups every day, but they want other evidence of reduced risk. A strong business plan, relevant industry experience, proof of funding and reserves, a solid personal credit history, and willingness to offer a larger deposit or limited personal guarantee all help a new business get approved.
What helps most on a startup application:
- Years of experience running or managing the same type of business
- Liquidity: several months of rent held in reserve beyond buildout costs
- SBA or bank financing already in process
- A realistic, specific plan (landlords can tell the difference)
- Choosing a second-generation space that needs less landlord investment
Frequently asked questions
Does SB 1103 apply to every small business?
No. It applies to qualifying microenterprises, restaurants with fewer than 10 employees, and nonprofits with fewer than 20 employees, and you must notify the landlord in writing.
Do landlords run credit checks on commercial tenants?
Often, yes, on both the business and any personal guarantors. Commercial landlords must follow applicable consumer reporting rules for personal credit.
Does a tenant rep replace an attorney?
No. They handle different parts of the deal. Most business owners benefit from both.
If a landlord asked for your financial package tomorrow, how ready would you be?
