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California’s commercial real estate owners must comply with new laws

The Los Angeles area is experiencing a boom in commercial real estate. Industrial properties in Los Angeles and Orange counties are some of the highest priced in the country. Commercial purchasers and tenants are flocking to the Inland Empire, east of L.A., as former agricultural land sprouts huge manufacturing buildings popular with big-name retail stores.

The Los Angeles Times recently reports that California’s commercial real estate market will continue to soar for the next few years. This is good news for businesses in the construction and real estate industries. However, as business picks up, it is important for California companies to stay up-to-date on changing laws in the state.

California law changes

Earlier this year, California legislators passed Assembly Bill 1003 – a new provision in the California Global Warming Solutions Act of 1996 – which will require certain commercial properties to comply with new emissions and energy-usage disclosure rules. The new law is an attempt by the state to reduce greenhouse gas emissions and offers an apples-to-apples comparison of energy usage to purchasers, tenants and lenders.

Pertinent portions of Assembly Bill 1003 include the following:

  • Starting on September 1, 2013, commercial building owners must disclose the past 12 months of energy and water usage prior to selling, leasing or financing buildings in excess of 50,000 square feet. Such buildings must also be registered with the Energy Star Portfolio Manager Benchmarking Tool, a monitoring system operated by the Environmental Protection Agency.
  • On January 1, 2014, the square footage drops to 10,000 feet, requiring many more owners to register and disclose their energy usage.
  • On July 1, 2014, owners of buildings with 5,000 or more square feet must begin providing energy usage disclosures as well. Buildings under 5,000 square feet are not affected by the new law.

An additional change to commercial law may also affect Californians. The California Supreme Court recently rendered a decision that allows parties to written contracts to dispute express terms of a commercial deal with oral evidence. For example, a party may present evidence during litigation that express portions of a written contract were not part of the parties’ oral agreement. The court’s decision changes 75 years of well-settled law in the state and may change the face of contract law and a person or company’s ability to enforce their contracts.

Consult a California lawyer

It is important to have an experienced business and real estate lawyer on your side when faced with a dispute. An attorney knowledgeable about California laws may be able to help you avoid litigious situations and resolve issues that may arise.

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