Bill Text: CA AB450 | 2023-2024 | Regular Session | Amended

California Assembly Bill 450

Bill Title: Commercial real property.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2024-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB450 Detail]

Download: California-2023-AB450-Amended.html

Amended IN Assembly March 23, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 450

Introduced by Assembly Member Wendy Carrillo

February 06, 2023

An act to amend Section ~~10101 of the Commercial Code,~~ 1954.31 of the Civil Code, relating to leases.

LEGISLATIVE COUNSEL'S DIGEST

AB 450, as amended, Wendy Carrillo. ~~Leases.~~ Commercial real property.

Existing law authorizes a public entity to, by enactment of a statute, charter or charter amendment, or ordinance, establish a requirement for notice relating to the termination of a lease of commercial real property due to the expiration of its term. Existing law prohibits an enactment pursuant to that provision from applying to certain leases and rental agreements, including a lease, the term of which expires within 270 days after the effective date of the enactment.
This bill would instead prohibit an enactment pursuant to that provision from applying to a lease, the term of which expires within 271 days after the effective date of the enactment.
~~Existing law, the Uniform Commercial Code—Leases, governs any transaction, regardless of form, that creates a lease, as defined, and specifies the rights and obligations of the parties to leases.~~
~~This bill would make nonsubstantive changes to those provisions.~~

Vote: MAJORITY Appropriation: NO Fiscal Committee: NO Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 1954.31 of the Civil Code is amended to read:

1954.31.

A public entity may by enactment of a statute, charter or charter amendment, or ordinance, establish a requirement for notice relating to the termination of a lease of commercial real property due to the expiration of its term.

(a) The enactment shall contain provisions dealing with any or all of the following:

(1) The delivery of a negotiation notice by a tenant.

(2) A requirement for an owner to deliver an impasse notice at any time after delivery of the negotiation notice, except that:

(A) The requirement shall be inapplicable unless the tenant has been required to deliver a negotiation notice not less than 270 days before the expiration of the lease, and has done so.

(B) The mandate for delivery of an impasse notice shall not occur earlier than 180 days before expiration of the lease.

(D) Provision shall be made that the notice will include, in a form of type which will distinguish it from the body of the text of the balance of the notice, a disclosure reading, either:

(i) The giving of this notice does not necessarily preclude further dialogue or negotiation on an extension or renewal of the lease if the parties choose to negotiate, but the delivery of this notice discharges all obligations of ____ (the owner) under provisions of ____ (the enactment) and Section 1954.31 of the Civil Code; or

(ii) By giving this notice ____ (the owner) declares that he or she does not intend to negotiate further on any extension or renewal of the lease.

(3) Establish that a bad faith failure to comply with the enactment is subject to a remedy for actual damages.

(4) Any remedy under the enactment or Section 1954.31 shall be available only by an action brought by the owner or the tenant.

(b) The enactment shall contain (or shall be deemed to contain), a provision that:

(1) A tenant may not exercise any right pursuant to the enactment or this chapter, unless the tenant has performed the terms of the lease in such manner as would entitle the tenant to exercise any option he or she might possess under the lease.

(2) No right or cause of action accruing to a tenant pursuant to the enactment or this chapter, may be assigned other than to a person who is a lawful assignee of the lease, is in lawful possession of the premises under the lease, and is in compliance with paragraph (1).

(3) Nothing in the enactment or this chapter creates or imposes, nor shall be construed to create or impose, a duty to extend or renew, or to negotiate on an extension or renewal, of any lease; nor shall the delivery or receipt of any notice provided for by the enactment or by this chapter, constitute a waiver of any rights to continued performance under the covenants under the lease or to actions for possession.

(4) The delivery of any notice pursuant to the enactment or this chapter shall create a rebuttable presumption affecting the burden of proof, that the notice has been properly given.

(1) For any extension of the term of any lease without the mutual, written consent of the owner and the tenant.

(2) For any requirement on either party to offer to extend or renew or to negotiate an extension or renewal of the lease.

(3) Bar any action brought to recover possession whether by ejectment, unlawful detainer, or other lawful means.

(4) Any remedy under the enactment or this chapter, other than that which may be provided pursuant to paragraph (3) of subdivision (a).

(d) The provisions of any enactment adopted pursuant to this section shall not apply to:

(1) Any lease or rental agreement which is not in writing, which constitutes a tenancy at will, which is for a term of less than one year or for an unspecified term, which is a month-to-month tenancy or a tenancy at sufferance.

(2) Any lease, the term of which expires within ~~270~~ 271 days after the effective date of the enactment.

SECTION 1.Section 10101 of the Commercial Code is amended to read:
10101.
~~This division shall be known, and may be cited, as the Uniform Commercial Code—Leases.~~