ALthough i have heard murmuring about this for years, i only recently became aware that The City Council is presently considering a Commercial Rent Control Bill, Intro No.
847. The intro says it is designed "to create a small business lease program for
establishing an environment for fair negotiations in the commercial lease renewal
process in order to determine reasonable lease terms".
Half of that says nothing; the other half sounds reasonable with vaguely defined loft goals.
But according to one real estate lawyer, the proposed legislation is not limited to "small" business. The Bill applies to lease renewals for commercial premises where the landlord either refuses to offer a lease renewal or demands a rent in excess of 3% of the last month's rent on the expiring lease or is in excess of 15% above the last month's lease during the final
twelve months of a ten year lease. The Bill also provides that all leases can be
renewed at the option of the tenant and all disputes over the amount of rent would
be settled by arbitration.
The proposal is almost absurd it's hard to take seriously. But don't underestimate the city council's activism (among other things). Although there are also plenty of councilmembers getting big campaign contributions from real estate interests- so don't underestimate the Real Estate lobby either. It also could mean if someone has a below market lease, the landlord may never be able to bump it to market unless that tenant leaves of their own volition.
847. The intro says it is designed "to create a small business lease program for
establishing an environment for fair negotiations in the commercial lease renewal
process in order to determine reasonable lease terms".
Half of that says nothing; the other half sounds reasonable with vaguely defined loft goals.
But according to one real estate lawyer, the proposed legislation is not limited to "small" business. The Bill applies to lease renewals for commercial premises where the landlord either refuses to offer a lease renewal or demands a rent in excess of 3% of the last month's rent on the expiring lease or is in excess of 15% above the last month's lease during the final
twelve months of a ten year lease. The Bill also provides that all leases can be
renewed at the option of the tenant and all disputes over the amount of rent would
be settled by arbitration.
The proposal is almost absurd it's hard to take seriously. But don't underestimate the city council's activism (among other things). Although there are also plenty of councilmembers getting big campaign contributions from real estate interests- so don't underestimate the Real Estate lobby either. It also could mean if someone has a below market lease, the landlord may never be able to bump it to market unless that tenant leaves of their own volition.
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