Unlawfully restrictive covenants: grocery stores and supermarkets.

New Section 714.8.1 prohibits any person or entity from creating or recording a covenant, restriction, or condition that effectively prohibits or restricts grocery store use on property where a grocery store previously operated and ceased operations or is no longer in actual operation within a commercial project, effective January 1, 2027. This is a forward-looking ban on new covenants, complementing Section 714.8 which voids existing ones.

The definition of 'grocery store' or 'supermarket' now explicitly excludes two types of establishments: (1) those primarily engaged in retailing automotive fuels with a limited line of groceries, and (2) convenience stores or food marts selling a limited line of groceries such as milk, bread, soda, and snacks, unless they operate fuel pumps. The old version had no such exclusions.

A new notice requirement obligates the interested party to mail by certified mail to the current property owner a copy of the supporting documents, a copy of the statute, and a written explanation that the modification has been applied for recordation. This must be done before or simultaneously with submitting the modification document to the county recorder. Failure to provide this notice does not invalidate the recordation if the interested party cannot ascertain the owner's address after reasonable diligence.

The deadline for a party who received notice to file a suit challenging the validity of a restrictive covenant modification document was extended from 35 days to 60 days.

Coauthor list corrected from 'Kalra Bonta, Kalra, and Schiavo' to 'Bonta, Kalra, and Schiavo,' removing a duplicate name. Bill title updated to reference both new sections 714.8 and 714.8.1.

The definition of 'grocery store' or 'supermarket' was narrowed from 'any retailer that sells food items' to 'a retail store in this state that sells a broad range of perishable and nonperishable household food products for offsite consumption, such as fresh meat, poultry, and seafood, fresh produce, dairy products, frozen foods, canned foods, dry foods, baked goods, and beverages.' This excludes smaller or specialty food retailers.

A new alternative condition was added to subdivision (c)(1): a grocery store need not have previously operated on the specific property. It now also qualifies if it 'is no longer in actual operation within a commercial project or shopping center' pursuant to the exemptions in subdivision (i). This expands the bill's reach to properties in shopping centers where a grocery anchor has closed.

References to 'owner' throughout the operative provisions were replaced with 'interested party,' broadening who may submit modification documents, apply for release of violation notices, and bear liability for unauthorized recordation. The definition of 'interested party' already included lessees, option holders, and applicants for land use entitlements.

The deadline for filing a suit challenging the validity of a restrictive covenant modification document was extended from 35 days to 60 days after notice is given.

The exemption in subdivision (i)(2) for covenants that limit the number of grocery store tenants within a commercial project or shopping center was narrowed. It now only applies 'provided that at least one grocery store or supermarket is in actual operation within the commercial project or shopping center at the time enforcement of the provision is sought.' If no grocery store is operating, this exemption no longer protects the covenant.

Assembly Member Bonta was added as a coauthor of the bill.

The ground on which a county recorder may refuse to record a modification document was broadened. Previously it could only refuse if the county counsel found a grocery store did not previously operate on the property. Now it can refuse for 'any reason why the modification document is not appropriate under the terms of this section.'

The definition of 'interested party' in subdivision (h) was substantially rewritten. The old version limited eligibility to grocery store owners, property owners with a leased grocery store, lessees of a grocery store, and parties in contract to purchase a grocery store. The new version broadens this to: (1) the owner or current lessee of the property (not just grocery stores), (2) anyone holding an option or purchase agreement for the property, (3) anyone who has submitted a complete application for a business license, conditional use permit, or other land use entitlement to operate a grocery store, and (4) parties under contract to lease the property for grocery store purposes. This means a prospective developer who has merely applied for permits can now invoke the covenant-voiding process.

The fiscal committee designation changed from 'no' to 'yes' and the state-mandated local program designation changed from 'no' to 'yes.' This acknowledges that the bill imposes duties on county recorders and county counsel that constitute a state-mandated local program with potential fiscal impact, which may trigger reimbursement obligations or require fiscal analysis.

The formal short title 'The Grocery Store Access Act' was removed from the legislative counsel's digest heading, though the section itself (714.8(a)) still carries that name in the operative text.

Assembly Members Kalra and Schiavo were added as coauthors of the bill.

The core provision (Section 714.8(c)) was changed from automatically voiding ALL covenants that restrict grocery store use to only voiding them 'against an interested party' when two conditions are met: a grocery previously operated on the property and ceased operations, AND an approved restrictive covenant modification document has been recorded.

A new subdivision (i) exempts several common commercial arrangements: exclusive-use provisions in landlord-tenant leases (if at least one grocery is operating in the project), covenants that limit but do not prohibit the number of grocery tenants, restrictions agreed to by a government entity in development agreements, and aesthetic/design standards or common-area maintenance fees.

A new subdivision (g) clarifies the bill does not invalidate building codes, fire codes, health and safety regulations, parking requirements, signage rules, or any local land use entitlements. It also states the bill does not authorize any use inconsistent with the local general plan, zoning, or specific plans.

A new subdivision (d) establishes a multi-step process: the interested party submits documents to the county recorder, who forwards them to county counsel within 5 business days; county counsel has 15 days to determine whether the restriction is prohibited and whether prior grocery operation is established; notice must be sent by certified mail to known interest holders; the county recorder may not record the modification if county counsel finds no prohibited restriction or no prior grocery operation.

A new subdivision (h) defines 'interested party' as: the owner of a grocery store, the owner of property containing a leased grocery store, the lessee of a grocery store, or a party in contract to purchase one. Only these parties can invoke the unenforceability.

New provisions allow a city or county to record a notice of violation if the property is used in a manner that violates the restrictions, and the invalidated covenant becomes enforceable again while the property is being used in violation. A 35-day challenge period applies for parties who received notice.

The bill was reclassified from 'no state-mandated local program' to 'yes state-mandated local program' and from 'no fiscal committee' to 'yes fiscal committee.' A new Section 3 states no reimbursement is required because local agencies can levy service charges, fees, or assessments to cover the mandated costs.

New subdivision (f) provides that a prevailing interested party in litigation is entitled to recover litigation costs and reasonable attorney's fees, limited to costs incurred after the modification document was recorded.

A new subsection (a) is added to Section 714.8 stating the section shall be known as and may be cited as the 'Grocery Store Access Act.' The original subsections are renumbered from (a)-(b) to (b)-(c).

Minor text corrections in the legislative findings: '1 in 5' changed to 'one in 5,' 'Southern California' changed to 'southern California,' 'establishing at site' corrected to 'establishing at a site,' and 'indigenous' capitalized to 'Indigenous.'

Assembly Member Wicks is added as principal coauthor, and the legislative counsel's digest is updated to reflect the amended version with the short title.