Bill Seeks to Prevent Economic Hardship for Small Business Owners by Creating Disclosure Requirement
PHILADELPHIA, November 18 – Today, Councilmember and Majority Leader Cherelle L. Parker (9th District) introduced legislation to help protect commercial tenants against financial losses. The bill will require that individuals or entities leasing commercial properties provide potential tenants with a City-issued guidebook containing zoning information prior to signing a lease.
“All too often, we have seen small business owners entering into leases without being informed of the zoning of the property by the property owner or their designated representative,” Parker said. “Too many times we have witnessed the financially devastating consequences for entrepreneurs when they find out they must undergo a months-long zoning process to use a property that they have poured their life savings into for rent, improvements, and other expenses.”
The bill seeks to bolster transparency in the commercial leasing process by ensuring that prospective tenants have the time and guidance to perform the necessary due diligence about the property they are interested in leasing. Currently, commercial landlords are not required to disclose zoning information about a property to those interested in leasing it. By ensuring that a property owner or designated representative provides prospective tenants with a City-issued guidebook 7 days in advance of a lease being signed, this legislation offers a layer of protection to small business owners who may not be familiar with local zoning rules. The guidebook will include information about how to research permitted and approved uses of a property, how to determine whether Zoning Board approval is required for a business to open, and where to get answers or clarification.
To prove that the disclosure requirement in the legislation has been met, both parties must sign and retain acknowledgement forms stating that the tenant has been provided with the guidebook before signing the lease. The bill grants tenants the ability to sue property owners who fail to comply with this requirement, noting that tenants can also seek monetary compensation for damages sustained as a result of not having the necessary zoning information prior to signing the lease.
Organizations that work with small business owners across the City are looking forward to the passage and implementation of this legislation.
“Philadelphia VIP supports the passing of the Commercial Tenant Protection Legislation introduced by Councilmember Parker. We hope that this measure will help prevent commercial tenants from enduring economic hardship caused by complex zoning variance and business licensing issues after entering into a multiyear lease without knowing the property’s zoning designation,” said Ivelisse Cruz, Nonprofit & Small Business Coordinator, Philadelphia VIP.
“I want to thank Councilwoman Parker for preparing and introducing this legislation. I think it will help new small business owners by making property owners responsible for providing current and accurate zoning information to potential tenants,” said Michael Harris, Executive Director, South Street Headhouse District.
The Commercial Tenant Protection Legislation will be heard in the Committee on Commerce and Economic Development on Tuesday, November 30th at 1 p.m.
“Removing barriers to success for Philadelphia’s small businesses should be a top priority for all. Small businesses are a significant source of family-sustaining jobs in our City, and we should do everything in our power to help these enterprises develop and grow,” Parker said. “I am proud to continue to promote entrepreneurship and protect our small businesses.”
Read the legislation: CM Parker – Commercial Tenant Protection Ordinance 11.18.21
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