In Sixteen Candles, Samantha’s big day shows up and her entire family forgets it. SB 1103 had a similar debut. It took effect on January 1, 2025, and almost nobody told the people it was written for.
For decades, California’s tenant protections were built around apartments. If you leased a storefront, a small office, or a kitchen, you were on your own with whatever the landlord’s form lease said. SB 1103, the Commercial Tenant Protection Act, changed that for the smallest businesses and nonprofits in the state. But it doesn’t switch on by itself. You have to claim it.
And here’s the part that should get your attention: some landlord lease forms now include a line where the tenant states it is not a qualified commercial tenant. Sign that without checking, and you may have signed away the law’s front door. Here’s what every small business owner in Ventura and Santa Barbara County should know.
What is SB 1103?
Short answer: SB 1103, also called the Commercial Tenant Protection Act, is a California law effective January 1, 2025. It gives qualifying small businesses and nonprofits new rights around operating cost (CAM) charges, advance notice of rent increases, lease translation, and termination notice. It amended Civil Code Sections 827, 1632, and 1946.1 and added Section 1950.9.
It does not cap rent or create commercial rent control. California law still prohibits commercial rent control. What SB 1103 does is make the costs you’re charged more transparent, give you more warning before changes, and give you tools to push back when a landlord doesn’t follow the rules.
Who qualifies as a qualified commercial tenant under SB 1103?
Short answer: A qualified commercial tenant is a microenterprise (five or fewer employees including the owner, that generally lacks sufficient access to loans or capital), a restaurant with fewer than 10 employees, or a 501(c)(3) nonprofit with fewer than 20 employees. The tenant must also give the landlord written notice and a self-attestation of its employee count.
Microenterprise
5 or fewer, including the owner (part-time counts)
Generally lacks sufficient access to loans, equity, or other capital
Restaurant
Fewer than 10
None beyond the notice
Nonprofit
Fewer than 20
Must be a 501(c)(3)
The “lacks access to capital” part of the microenterprise definition isn’t precisely defined. If you’re a small sole proprietor or partnership without significant financing, you may well qualify, but it’s worth a quick conversation with an attorney before you rely on it.
How do I claim SB 1103 protections?
Short answer: Give your landlord a written notice that you are a qualified commercial tenant, with a self-attestation of your number of employees. For leases longer than month-to-month, deliver it before or when you sign the lease and again every year. Keep a dated copy and proof of delivery.
The protections apply when the notice has been provided within the previous 12 months. Put an annual reminder on your calendar tied to your lease anniversary.
A simple notice can look like this. Have your attorney review it before you use it.
Date: ________
To: [Landlord name and notice address from the lease]
Premises: [Street address and suite]
[Business legal name] is a qualified commercial tenant as defined in California Civil Code Section 1950.9, as a [microenterprise / restaurant / 501(c)(3) nonprofit organization].
Self-attestation: I attest that as of the date above, [Business legal name] has [number] employees, including owners, whether full time or part time.
Signed: ________ Name and title: ________
Which leases does SB 1103 apply to?
Short answer: The operating cost rules apply to qualified tenants’ leases signed, started, or renewed on or after January 1, 2025, to all week-to-week and month-to-month tenancies regardless of when they began, and to older leases that don’t contain a provision about building operating costs. The rent notice and translation rules also apply to qualified tenants.
If you signed a multi-year lease in 2023 and it has a standard CAM provision, the operating cost rules may not reach you until you renew. That makes your next renewal a good moment to claim your status in writing.
How does SB 1103 change CAM and operating cost charges?
Short answer: For qualified tenants, landlords can only charge building operating costs that are allocated proportionately (by square footage or another documented method), incurred within the prior 18 months or reasonably expected within the next 12, and backed by supporting documentation. Tenants can request that documentation, and the landlord must provide it within 30 days.
Under Civil Code Section 1950.9, a landlord charging a qualified tenant for operating costs must also:
- Give you notice before you sign the lease that you can inspect supporting documentation on written request
- Not charge costs you paid directly to a third party, or costs already reimbursed by insurance, another tenant, or anyone else
- Not change the allocation method or formula in a way that raises your share without written notice and documentation
These operating cost protections can’t be waived in the lease.
What counts as supporting documentation for operating costs?
Short answer: Supporting documentation is a dated, itemized quote, contract, receipt, or invoice from a licensed contractor or service provider. It must include a tabulation showing how costs are allocated among tenants and a signed, dated attestation from the landlord that the documentation and costs are true and correct.
A one-line “CAM reconciliation: $4,812” doesn’t meet that standard. If your annual reconciliation looks like a single number with no backup, a written request for supporting documentation is your first move.
How much notice does a landlord have to give before raising rent under SB 1103?
Short answer: For qualified commercial tenants, a rent increase of 10 percent or less (counting all increases in the prior 12 months) requires at least 30 days’ written notice. An increase of more than 10 percent requires at least 90 days. The increase isn’t effective until the notice period has passed.
The notice must be delivered personally or by mail under the Code of Civil Procedure and must include information about Civil Code Section 827. The statute is clearly aimed at month-to-month and shorter tenancies, but part of its language refers to all leases with qualified tenants, and some attorneys advise landlords to follow it across the board. If your lease already has fixed annual increases, those scheduled bumps are set by the lease itself.
Does SB 1103 require my lease to be translated?
Short answer: Yes, in some cases. If a lease with a qualified commercial tenant is negotiated primarily in Spanish, Chinese, Tagalog, Vietnamese, or Korean, the landlord must provide a translation of every term and condition in that language before the lease is signed. Tenants may be able to cancel a lease that wasn’t properly translated.
This extends a rule that has protected residential tenants and consumers for years. If you negotiated your terms in one of these languages and received only an English lease, talk to an attorney.
What does SB 1103 say about ending a month-to-month commercial tenancy?
Short answer: For a qualified tenant in a tenancy without a set term, the landlord must give at least 60 days’ written notice to terminate, or 30 days if the tenant has occupied the space for less than a year. The tenant must give notice at least as long as the rent period.
Before SB 1103, 30 days was the general rule for commercial month-to-month tenancies. Sixty days isn’t forever, but it’s twice as long to find a new home for your business.
What happens if a landlord violates SB 1103?
Short answer: A landlord who violates the operating cost rules can be liable for actual damages and, at the court’s discretion, attorney’s fees and costs. If the landlord acted willfully or with oppression, fraud, or malice, the tenant can recover three times actual damages plus punitive damages. A tenant can also raise a violation as a defense in an eviction based on unpaid operating costs.
District attorneys, city attorneys, and county counsel can also seek injunctive relief against landlords who violate the operating cost section.
Can a landlord make me waive SB 1103?
Short answer: The operating cost protections in Civil Code Section 1950.9 cannot be waived. But a lease can ask you to state that you are not a qualified commercial tenant. If you do qualify, don’t sign that representation as written. Strike it or replace it with your written notice of qualified status.
This is the quiet trap in many 2025 and 2026 lease forms. The clause often reads as boilerplate in a long list of tenant representations. Read every one.
What should I do if I think my business qualifies?
Short answer: Count your employees, confirm which category you fit, send your landlord a written qualified commercial tenant notice with a self-attestation, calendar an annual renewal of that notice, and request supporting documentation for your operating cost charges. Before signing any new lease or renewal, check for clauses saying you don’t qualify.
- Count every employee, including owners and part-timers
- Confirm your category: microenterprise, restaurant, or 501(c)(3)
- Send the written notice and self-attestation, and keep proof of delivery
- Set a yearly reminder to send it again
- Request supporting documentation for your current CAM or operating costs
- Have an attorney review any lease clause that says you are not a qualified tenant
Frequently asked questions
Does SB 1103 cap how much my rent can go up?
No. It requires advance notice of increases for qualified tenants but does not limit the amount. California law prohibits commercial rent control.
Is SB 1103 the same as AB 1482?
No. AB 1482 caps residential rent increases. SB 1103 covers small commercial tenants and focuses on notice and cost transparency.
Do part-time employees count toward the limit?
For microenterprises, yes: the definition counts the owner and part-time employees. For restaurants and nonprofits the statute doesn’t spell it out, so count conservatively and ask your attorney.
Does SB 1103 apply to office and industrial space?
Yes. It covers commercial real property generally, including retail, office, restaurant, and industrial space, anywhere in California.
Does SB 1103 apply in Ventura and Santa Barbara County?
Yes. It’s a statewide law and applies to qualifying tenants in every California city and county.
Does your business fit one of the three categories, and has your landlord ever received a notice saying so?
