Is there a maximum as to how much a landlord can raise rent on a commercial lease?

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Is there a maximum as to how much a landlord can raise rent on a commercial lease?

My company is located in West Hollywood, CA. The current commercial lease is
3,900.00 per month and we were supposed to renew the lease as of May 1st,
but have not signed yet because the landlord increased the monthly lease to
4,400.00. Is there a maximum as to how much a landlord can raise rent on a
commercial lease?

Asked on May 9, 2019 under Real Estate Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

No, there is not, unfortunately. While there commonly are limits on residential rent increases to ensure that people are not priced out of their homes, there is no such concern or policy or protections for commercial tenants. Rather, since commercial tenants are seen as "sophisticated entities" able to bargain, negotiate, and do what is in their own interest (i.e. decide if the rental, given its cost, is right for them), and since there is no humanitarian concern over homeless businesses the way there is homeless people, a commercial landlord is free to ask for any amount of rent he wants. The belief is that the market will dictate an appropriate rent; a too-greedy landlord will be unable to lease his premises. But that said, a landlord can be too optimistic or greedy and can ask for more than is reasonable, if he wants.


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