How Landlords Would Negotiate Lease Terms Under SB-939

California SB 939—a new bill that will provide protections for commercial tenants impacted by the pandemic—has passed the Senate Judiciary Committee, and will go for a vote in the Committee on Appropriations later this month. The bill has been highly controversial, in that it will place a moratorium on commercial evictions and allow commercial tenants to open new negotiations on lease terms or terminate existing leases. However, the bill itself does not provide guidance on how landlords should renegotiate lease terms.

“SB-939 does not provide any guidance as to how landlords and tenants should renegotiate rent and other economic lease terms,” Jonathan Zweig of Cox, Castle & Nicholson, tells GlobeSt.com. “Once a tenant is eligible under Section 1951.10, it can attempt to renegotiate by engaging in ‘good faith negotiations.’ However, this is a subjective standard that may provide a means for abuse, as tenants can engage in a renegotiation without any intent to continue the lease, and then terminate with minimal liability.”