Legal Question in Real Estate Law in California

Re: Salon booth rental / commercial subletting

Security deposits are common in commercial lease/rental agreements and are not prohibited by law. It is also common to ask commercal tenants to pay their rent in advance. If they are a periodic tenant (i.e., week to week, month to month), they should be paying their rent at the beginning of the week. After all, if you allow them to pay the rent at the end of the month, rather than at the beginning of each week, what is to prevent them from using the space, then refusing to pay four weeks worth of rent.

Although you do not necessarily need to have a rental agreement for a periodic tenancy of week to week in writing, it is probably a good idea to do so. Having your agreement with your tenants in writing avoids confusion, misunderstandings about the relationship, and the kind of situation in which you currently find yourself.

Re: Salon booth rental / commercial subletting

I would take a different approach; I would style the agreements with the booth renters as licenses, and not as rental agreements, leases or subleases.

Much of what they are telling you is based on what they've learned about residential leases from being tenants themselves, or talking to friends about tenants' rights.

I do not know the customs of your business; maybe it is customary to treat the boot rentals as leases and consider yourself a landlord; but in my humble opinion, you are more like the movie theater when it licenses a moviegoer a seat to see one flick. The seat is not real estate and the person sitting in it is not a tenant. It's the same deal when you park your car in a parking lot or garage - the space is licensed to you.

The differences between a license and a lease are rather numerous. Suffice it to say that the licensee has many fewer rights than a tenant. Licenses can be oral (but I don't recommend that) and can usually be revoked at any time. You can attach whatever conditions you are able to negotiate, including prepayment, cleaning deposits, etc. Licenses are also usually non-exclusive rights to the space, meaning you can inspect, clean, or even use the space yourself during off-hours, so long as you don't interfere with whatever rights you've granted the licensee.

Involving money, or not, is not what triggers the need to put an agreement in writing. Many written contracts don't involve money; lots of transactions that involve money aren't contracts and don't require them.

Further, you can ask for a deposit of any size you can get away with in negotiation...in residential rentals, there's a maximum, but in most other business deals the parties are free to negotiate whatever terms suit them.

About the only thing you can't do is change the terms of an unexpired agreement that's already in place. If you told a renter on Jan. 1 she could use a booth for January at $150 plus 25% of her gross, no deposit mentioned, you'd have to wait until 2/1 to demand a deposit and $200. Of course, you can negotiate earlier, or give notice of the change earlier, but it couldn't become effective until 2/1 without you breaching your 1/1 agreement.

I hope this all helps. Look at the coupons given out at parking garages, or your Clippers' tickets, for typical, if abbreviated, license language.