Free California Commercial Lease Agreement Template

A California commercial lease agreement rents non-residential property — a storefront, an office, a warehouse, a restaurant space — to a tenant who will run a business from it. Civil Code § 1946.1(k)(1) defines commercial real property broadly, as all real property in the state apart from dwelling units, mobilehomes, and recreational vehicles.

California treated these leases as arm’s-length bargains for most of its history. That changed on 1 January 2025, when the Commercial Tenant Protection Act extended notice and disclosure duties to a defined group of small tenants.

Whether the newer rules apply turns entirely on who the tenant is.

Who Counts as a Qualified Commercial Tenant

Civil Code § 1946.1(k)(4) sets two tests, and both must be met. The tenant has to be a microenterprise, a restaurant with fewer than 10 employees, or a nonprofit organization with fewer than 20 employees. The tenant also has to tell the landlord, in writing, that it holds that status, along with a self-attestation about employee numbers.

Timing on that second test differs by tenancy. For a tenancy from week to week, month to month, or any period shorter than a month, the notice must have been given within the previous 12 months. For anything longer, it goes in before or upon signing the lease, and again every year after.

Notice Before a Rent Increase

Civil Code § 827(b) ties the notice period to the size of the rise. An increase of 10 percent or less takes 30 days’ notice. An increase above 10 percent — measured on its own or combined with other increases in the previous 12 months — takes 90 days, and Code of Civil Procedure § 1013 extends that where the notice goes by mail.

Two further points sit in the same subdivision. A commercial landlord has to include information about the subdivision’s provisions in the notice itself, and for a qualified commercial tenant the increase does not take effect until the notice period has run. A landlord who gets this wrong is not exposed to civil penalties under this subdivision.

Sixty days, where a qualified commercial tenant holds a periodic tenancy. Civil Code § 1946.1(b) requires the owner to give at least 60 days before the proposed termination date, and subsection (c) shortens that to 30 days where the tenant has occupied the property for less than a year. A tenant giving notice must give a period at least as long as the term of the periodic tenancy.

Unpaid rent runs on a much shorter clock. Under Code of Civil Procedure § 1161(2) a tenant is in unlawful detainer after default in rent and three days’ written notice requiring payment, counted excluding Saturdays, Sundays, and other judicial holidays. That notice has to state the amount due and the name, telephone number, and address of the person the rent goes to, and it may be served any time within one year after the rent falls due.

Where a lease simply runs out, § 1161(1) treats continued possession after the term expires as unlawful detainer in its own right.

A written California commercial lease agreement can leave the tenant a last route back. Code of Civil Procedure § 1174(c) applies where an unlawful detainer follows a rent default, the lease has not expired by its own terms, and the landlord’s notice did not state an election to declare a forfeiture.

The court may then delay the writ of possession, and must do so where the lease is written, runs more than one year, and has no forfeiture clause. The tenant, a subtenant, a mortgagee of the term, or another party interested in its continuance then has five days after judgment to pay the rent found due, with interest, damages, and costs. Paying satisfies the judgment and restores the tenancy.

1. Agree the commercial terms: rent and increases, the length of the term, renewal rights, and who carries taxes, insurance, and repairs.
2. Establish early whether the tenant is a qualified commercial tenant, since the notice duties above turn on it.
3. If the tenant qualifies, have them give the written status notice and self-attestation on the schedule § 1946.1 sets for their type of tenancy.
4. Decide deliberately whether to include a forfeiture clause, because § 1174(c) treats leases without one differently after judgment.
5. Give each party a signed copy and keep yours with your business records.

Beyond the statutory notice duties, the terms of a California commercial lease agreement are yours to negotiate. Cover at least:

• Legal names of landlord and tenant, including the entity behind the signature.
• A description of the space itself, down to the floor, suite, or unit number.
• Rent, the due date, and the basis and timing of any increase.
• The term, renewal rights, and what happens if the tenant stays past it.
• Which side pays taxes, insurance, and utilities, and who repairs what.
• How the space may be used, and the conditions on assigning or subletting.
• A notice address for each party, and whether a forfeiture clause applies.