Many new laws and legal theories appear first in California. One new bill and several recent judicial decisions have potential impact on California retail real estate landlords and tenants, and may be a preview of what can be expected in other jurisdictions across the country.
Legislation
Effective January 1, 2002, it is unlawful to demand any payment of money, including payment of "key money" or the lessor's attorney's fees reasonably incurred in preparing the lease or rental agreement as a condition of initiating, continuing, or renewing a commercial lease unless the amount of the payment is stated in the written lease agreement.
The restriction was imposed by a bill that amended the California Civil Code with the addition of section 1950.8. The new law also provides that any individual violating the provision will be subject to a civil penalty of three times the amount of actual damages suffered by the person seeking to obtain the lease of the property. Persons damaged also will
