Legal Question in Real Estate Law in California

Re: Key Money

"key money" is a tactic often practiced by many landlords, and the legality of such is somewhat questionable depending on the nature that it is done or requested. what i would strongly suggest to you would be to retain legal representation in this matter now for negotiations with your landlord regarding this requirement for a new lease and/or possibly retain house counsel on a monthly basis to help minimize or eliminate such business concerns now and in the future. a house counsel would probably do wonders for your company hands down and at a very affordable rate. if you would like further legal assistance in this area right now and/or in the future, feel free to email my office directly with how you may like to proceed.

Re: Key Money

Yes, it's legal in a commercial setting, and probably not in a residential setting where deposits and anything masquerading as a deposit is subject to statutory limits.

Whether it makes business sense and whether it is negotiable, a strict requirement, or a big bluff depends upon the economics of the market in your area for that kind of property.

My experience suggests that anything that amounts to a whopping increase in rent or deposit requirements in today's market is a bluff unless you have been a less than ideal tenant and the landlord would rather be rid of you.

Therefore, my suggestion is to stop exchanging writings and ask for a face-to-face negotiation, in which you should examime the landlord's attitude and try to get to the bottom line.