Cal. Civ. Code § 1950.8
California Civil Code
Operative Text
(a) This section applies only to commercial leases and nonresidential tenancies of real property. (b) It shall be unlawful for any person to require, demand, or cause to make payable any payment of money, including, but not limited to, “key money,” however denominated, 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 lease or rental agreement, unless the amount of payment is stated in the written lease or rental agreement. (c) Any person who requires, demands, or causes to make payable any payment in violation of subdivision (a), shall be subject to civil penalty of three times the amount of actual damages proximately suffered by the person seeking to obtain the lease or rental of real property, and the person so damaged shall be entitled to an award of costs, including reasonable attorney’s fees, reasonable incurred in connection with obtaining the civil penalty. (d) Nothing in this section shall prohibit the advance payment of rent, if the amount and character of the payment are clearly stated in a written lease or rental agreement. (e) Nothing in this section shall prohibit any person from charging a reasonable amount for the purpose of conducting reasonable business activity in connection with initiating, continuing, or renewing a lease or rental agreement for nonresidential real property, including, but not limited to, verifying creditworthiness or qualifications of any person seeking to initiate, continue, or renew a lease or rental agreement for any use other than residential use, or cleaning fees, reasonably incurred in connection with the hiring of the real property. (f) Nothing in this section shall prohibit a person from increasing a tenant’s rent for nonresidential real property in order to recover building operating costs incurred on behalf of the tenant, if the right to the rent, the method of calculating the increase, and the period of time covered by the increase is stated in the lease or rental agreement.
Cal. Civ. Code § 1950.8 governs commercial and other nonresidential real property leases, prohibiting landlords from demanding any off-the-books payment—such as 'key money' or lease-preparation attorney's fees—as a condition of starting, continuing, or renewing a tenancy unless that payment is clearly spelled out in the written agreement. Advance rent, reasonable business charges like credit-check fees, and rent increases tied to operating costs are all permitted, provided the written lease discloses the amounts and methodology. A landlord who collects an undisclosed payment in violation of this rule faces a civil penalty of three times the actual damages suffered by the prospective or current tenant, plus the tenant's attorney's fees and costs.
Plain English — not legal advice.
Under Cal. Civ. Code § 1950.8, compliant commercial landlords ensure that every monetary requirement tied to initiating, continuing, or renewing a lease—including attorney's fees for drafting the agreement, advance rent, credit-check fees, cleaning fees, and operating-cost pass-throughs—is expressly disclosed in the written lease or rental agreement. Operators generally audit their standard lease forms to confirm that no payment obligation is left to side agreements or informal understandings, since undisclosed charges can trigger treble-damages liability. Keeping thorough written records of all disclosed charges and the lease provisions authorizing them is a common practice among property managers seeking to stay within the statute's requirements.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Cal. Civ. Code § 1950.8 gives commercial tenants the right to refuse any payment—such as 'key money' or the landlord's lease-drafting fees—that is not expressly stated in the written lease or rental agreement. If a tenant has already paid such an undisclosed charge, the statute provides a civil penalty remedy of three times actual damages, plus recovery of the tenant's own attorney's fees and costs. Tenants who believe a payment was improperly demanded can document the circumstances and consult a tenant-rights organization or attorney familiar with commercial leasing to understand the available enforcement options under this provision.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated September 3, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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