In the United States, legislatures are quite active, passing and modifying laws that affect all facets of life. Currently, the commercial real estate (CRE) law field is seeing several shifts, particularly in zoning. Across the U.S., many states have made zoning laws more flexible, which may impact the space available for commercial real estate owners. It is essential to be aware of these and other changes in the law if you are interested in investing.
Florida CRE Law Changes
2024-25 was a busy legislative year in Florida, with multiple different CRE laws coming into force at a time. Most relevant to commercial property owners are updates to the Live Local Act. Key changes include:
- Flexibility for Mixed-Use Projects: Local governments cannot require that more than 10% of a mixed-use project’s square footage be used for non-residential purposes.
- Defined Height and Density Limits: Building height regulations defaults to either local government limits or three stories (whichever is higher), capped at 10 stories. These rules reference standards effective as of July 1, 2023.
Texas CRE Law Changes
In 2025, Texas has made significant legal changes in the commercial real estate sector, primarily impacting property rights, zoning laws, and data privacy.
Zoning and Adaptive Reuse
- Ease of Rezoning: Legislation aims to make it easier to convert commercial properties like office buildings, shopping centers, and warehouses into housing.
- Housing Shortages: Bills in consideration would permit mixed-use and residential development on commercial properties, addressing housing supply shortages. SB840 proposes that cities and counties would not need to rezone when converting commercial properties into residential uses.
Data Privacy and Security
- Commercial property owners collecting tenant or customer data (leases, security logs, etc.) now have legal obligations to protect that information
- Retail and mixed-use landlords engaging in consumer tracking (via Wi-Fi, loyalty programs, etc.) may need to comply with new data protection requirements.
Broker Regulations
Financing brokers working in commercial sales must register with the Texas Department of Banking and file annual renewals.
Texas Data Privacy & Security Act (HB4)
This act restricts the sale and processing of personal consumer data by businesses operating in Texas, expanding data privacy rights. Texas joins California, Virginia, and other states in enacting strict consumer data privacy laws.
Who benefits?
- Enterprise-grade landlords with advanced compliance structures: Large firms with the resources to implement privacy-focused infrastructure will have a competitive edge as compliance burdens grow.
- Class A office landlords catering to tech tenants: Demand for secure, privacy-compliant workspaces will rise as data governance becomes a boardroom priority.
Who Loses?
- Small landlords collecting tenant data: If you own a commercial property and store customer or tenant data (leases, security systems, access logs, etc.), you now have legal obligations to protect that information.
- Retail and mixed-use landlords: Shopping centers and mixed-use spaces that engage in consumer tracking (via Wi-Fi, loyalty programs, or smart surveillance) may need new systems to match regulations.
Strategic Takeaways:
- Landlords should audit their current data collection practices.
- Investors should check for hidden risks involving data collection when considering new properties.
TREC Contract Form Changes
The Texas Real Estate Commission (TREC) introduced a new Addendum for Section 1031 Exchange, allowing parties to disclose their intent to use the property in a 1031 exchange and cooperate accordingly.
Property Tax Relief Act (SB2): 2025–26
This act includes provisions that limit increases to appraised values of real property not covered by a homestead exemption. Specifically, it includes a “Circuit Breaker” Appraisal Cap for Non-Homestead Properties: a limitation on the appraised value of non-homestead properties (e.g., rental properties, second homes, commercial properties) valued at $5 million or less. This cap limits the annual increase in appraised value for these properties to 20%. This provision, however, is a temporary pilot program in effect for three years (2024–2026).
Who benefits:
- Owners of long-held properties: If you’re holding commercial real estate in high-growth markets like Austin, Houston, or San Antonio, the new law limits future tax exposure, making it easier to maintain lower costs.
- Retail tenants on triple-net leases (NNN): Many small businesses that lease space under NNN agreements, where tenants pay property taxes, will see more predictable costs
Who loses:
- New entrants into the Texas CRE market: Investors acquiring properties at current high valuations won’t benefit from retroactive caps, meaning they could see higher effective tax burdens than long-term holders.
- Developers and land speculators: The law is likely to drive a widening gap between stabilized assets and new developments, potentially chilling speculative land investment.
Tennessee CRE Law Changes
2025 commercial real estate laws in Tennessee include:
Zoning Information in Deeds
A new law requires deeds of conveyance to include the property’s zoning classification at the time of recording.
Commercial Unlawful Occupant Removal
A new law, SB 0292, establishes a process for the immediate removal of unlawful occupants of commercial real property. The law takes effect on July 1, 2025.
Developers Hiring Inspectors
A new law allows Tennessee developers to hire their own building safety inspectors. This change, which took effect on October 1, 2024, grants developers the option to use third-party inspectors to verify compliance with environmental, safety, and building codes. This law also includes provisions for time limits on approving building plans and permits.
While the new law allows for private inspections, city and state officials are still required to review permits and inspections submitted by private contractors. The law prohibits third-party inspectors from having conflicts of interest with the developer or the project.
Real Estate Agency Practices
The National Association of REALTORS® has updated its Code of Ethics and Standards of Practice regarding disclosures in listing contracts, including compensation and agency relationships.
California CRE Law Changes
Effective Jan. 1, 2025, California changed its laws on commercial tenancies, protecting small tenants who may not speak English.
The new clauses, which are four key provisions of 23/24 SB 1103, look like this:
- There are new notice requirements for owners who intend to raise rent for month-to-month tenants. For rent increases of 10% or less the owners must provide these tenants at least 30 days’ notice or more. For increases of more than 10%, owners must provide at least 90 days’ notice.
- Month-to-month leases will automatically renew unless the owner gives a 60-day notice of termination for tenants of more than a year. If the tenant has a tenancy term of less than a year, a 30-day notice will suffice.
- Lease agreements with smaller tenants who speak primarily Spanish, Chinese, Tagalog, Vietnamese, or Korean must be translated into the appropriate language. The translation must be delivered to the tenant.
- Owners must allocate building operating fees proportionately to each tenant and provide detailed, itemized documentation. If an owner claims that a small tenant did not pay a fee, the tenant can argue that the owner violated this requirement.
Owners that rent to small tenants on shorter-term rental agreements will need to learn and implement this law.
Navigate Commercial Real Estate Law Change with STRATAFOLIO
CRE law changes are easier to manage when your data is easier to manage. STRATAFOLIO helps you organize, process, and share important financial information. Ease of access makes it simpler to understand how new regulations might affect your business. For more information on how STRATAFOLIO can help, schedule a free demo today.
