California’s Eviction Moratoriums in the Age of COVID-19
As the Coronavirus that causes COVID-19 spread across the state in March, Governor Newsom issued an executive order that allows local governments to enact their own eviction moratoriums for both residential and commercial tenants, if the basis for the eviction is non-payment of rent due to a COVID-19 related reason. Local governments were previously forbidden from enacting their own eviction restrictions.
Many local governments raced to enact eviction moratoriums. Most municipal and county governments have enacted eviction moratoriums or resolutions, including the counties and cities of San Diego, Riverside, Orange, San Francisco, Irvine, and Los Angeles. The common thread of these moratoriums is additional time for tenants to pay rent, a pause on evictions for non-payment of rent, but, at this time, no rent abatement or forgiveness.
We are providing an update on the current status of statewide protections and eviction moratoriums for major Southern California jurisdictions.
Governor Newsom Issues State-Wide Residential Renters Protection
Although no state-wide eviction moratorium exists, Governor Newsom signed an Executive Order on March 27, 2020, that provides qualifying residential tenants sixty additional days to respond to an unlawful detainer (eviction) lawsuit. Under normal circumstances, when a landlord files an eviction lawsuit, and before the court may enter a judgment of possession/eviction, a tenant has only five days to respond to the lawsuit. By giving qualifying tenants an additional sixty days to respond, this Order effectively gives residential tenants sixty additional days of protection against eviction. However, the Order does not relieve tenants of the obligation to pay the unpaid rent and does not stop landlords from filing unlawful detainer cases; it simply gives tenants more time to respond to the lawsuit.
To receive protection under this Executive Order, a tenant must notify the landlord in writing within seven days of when rent is due that the tenant needs to delay all or some payment of rent because of an inability to pay due to reasons related to COVID-19. Tenants must also provide documentation of their inability to pay, such as employment termination notices or medical bills.
The Governor’s Executive Order only protects residential tenants and not commercial tenants. The Order is effective through May 31, 2020, and has not been extended.
Judicial Council Issues Emergency Order
In response to the escalating state-wide crisis and perhaps also in response to the disjointed and disparate array of protections offered by local governments (some providing none), the Judicial Council on April 6, 2020, issued an emergency order that prohibits all California courts from issuing summonses in unlawful detainer cases, unless necessary to protect public health and safety. The order applies to all unlawful detainer cases, whether based on nonpayment of rent or any other grounds. Without a summons, landlords are unable to serve or move forward with unlawful detainer lawsuits.
This rule will remain in effect until ninety days after the Governor declares that the COVID-19 state of emergency is lifted, or until amended or repealed by the Judicial Council.
Local Eviction Moratoriums
San Diego County and City
Both San Diego County and City issued moratoriums on evictions on March 25, 2020, covering both residential and commercial tenants. The County moratorium covers the unincorporated areas of the County. The moratoriums are similar, but with some key differences.
Both County and City moratoriums require tenants to provide their landlords written notice of their inability to pay rent due to “financial impacts” related to COVID-19. Landlords are then prohibited from evicting the tenant for nonpayment of rent. However, the County requires the notice to be provided not later than seven days after the rent’s due date and the City requires the notice to be provided by the date rent is due.
Both County and City moratoriums require tenants to provide landlords documentation of their inability to pay rent. The documentation must show a substantial decrease in household or business income, or substantial out-of-pocket medical expenses due to the COVID-19 pandemic, or by any government response to COVID-19.
The County requires documentation to be provided within two weeks of a tenant’s notice of inability to pay rent. The City requires the documentation within one week.
Under both County and City moratoriums, the rent that was due during the period of protection must still be paid, and the orders give tenants additional time to do so, but landlords are prohibited from charging or collecting late fees from tenants that have provided the required notice and documents.
The County moratorium and protections apply to rent due between March 4, 2020 and May 31, 2020. The City moratorium and protections apply to rent due between March 12, 2020, and June 30, 2020. Under the County moratorium, a tenant that gave the required notice shall have three months from June 1, 2020, to pay the unpaid rent. Under the City moratorium, a tenant that gave the required notice shall have until September 25, 2020, to pay the unpaid rent.
Orange County and Local Cities
Orange County has not adopted a county-wide eviction ban. However, many cities within Orange County have done so, including Anaheim, Buena Park, and Costa Mesa.
Irvine, one of Orange County’s largest cities, has adopted a nonbinding resolution encouraging all residential and commercial landlords within the City to refrain from evictions or rent increases.
Riverside County and Local Cities
Based on reporting in early May 2020, Riverside County supervisors directed their staff to research possible implementation of an eviction moratorium in unincorporated areas. As of the date of this article, no county-wide eviction ban has been enacted. However, many cities within Riverside County have adopted eviction moratoriums, including Palm Springs and Riverside.
The City of Riverside’s moratorium requires tenants to provide written notice of their inability to pay rent to their landlords not later than seven days after rent is due. Landlords’ ability to evict a tenant for non-payment of rent due to the COVID-19 emergency is suspended until the local emergency is lifted. Similar to other moratoriums, late fees are not permitted.
City of Los Angeles
City of Los Angeles was one of the first cities to enact an eviction moratorium in early March, covering both residential and commercial tenants.
Landlords cannot evict a residential or commercial tenant within the City for non-payment of rent during the local emergency period if the tenant cannot pay rent due to COVID-19 related reasons. Those reasons include loss of income due to a COVID-19 related workplace closure, child care expenditures due to school closures, health-care expenses related to being ill with COVID-19 or caring for a member of the tenant’s household or family who is ill with COVID-19, or reasonable expenditures that stem from government-ordered emergency measures.
Residential tenants have twelve months following the expiration of the local emergency period to pay any past due rent. Commercial tenants have three months following the expiration of the local emergency period to pay any past due rent.
The moratorium does not require tenants to provide notice to their landlords. Instead, tenants may use their qualifying inability to pay as an affirmative defense in an unlawful detainer action.
Landlords are prohibited from charging interest or late fees for unpaid rent due to COVID-19. Landlords were also ordered to give written notice to residential tenants of the protections afforded by the ordinance by April 30, 2020. Finally, these protections are in effect until the end of the local emergency period.
County of Los Angeles
County of Los Angeles’ eviction moratorium covers both residential and commercial tenants within the unincorporated areas of the County.
Unlike the City’s moratorium, under the county moratorium, tenants must first provide written notice of inability to pay rent not later than seven days after rent is due. Tenants’ inability to pay rent must be due to financial impacts related to COVID-19, the state of emergency regarding COVID-19, or following government-recommended COVID-19 precautions.
Tenants that fall under the moratorium have six months following the termination of the moratorium to pay their landlords any unpaid rent.
The County’s moratorium was set to expire on May 31, 2020, but on May 12, 2020 it was extended through June 30, 3030.
California Senate Bill SB-939
The proposed Senate Bill (SB) 939 would provide all small businesses financially impacted by the coronavirus pandemic (defined as a decline of forty percent or more of monthly revenue) the right to renegotiate their leases or terminate their leases if the parties cannot successfully renegotiate. It would also halt all evictions of small businesses until the end of the COVID-19 state of emergency. In its current form, SB-939 does not define what constitutes a “small business” other than to state that it does not apply to publicly-traded companies.
SB-939 permits small business tenants, financially impacted by the COVID-19 crisis, to demand a renegotiation of their lease. The parties must negotiate in good faith. If negotiations are unsuccessful, the tenant may terminate its lease. If the tenant terminates its lease, it will owe only three months of past due rent “incurred during the civil authority and regulations related to COVID-19” and all unpaid rent during the time before COVID-19.
Finally, under the bill as currently drafted, tenants would have one year, after the state of emergency is lifted, to pay any unpaid rent incurred during the state of emergency.
SB-939 was introduced in the State Senate in March 2020 and was last amended on May 13, 2020. A committee hearing on SB-939 was scheduled for May 22, 2020. If passed and signed by Governor Newsom, SB-939 will dramatically shift the financial burden of COVID-19 from commercial tenants to their landlords.
These are unprecedented times for both landlords and tenants. With most California courts still closed and as a result of the Judicial Council’s currently open-ended emergency order precluding the issuance of summonses in unlawful detainer lawsuits, landlords are prevented from initiating legal action to recover possession of rental premises. Based on the various eviction moratoriums, even if courts were open and could issues summonses, landlords cannot pursue eviction based on nonpayment of rent if the tenant qualifies for protection under the moratoriums.
To avoid taking impermissible legal action, landlords should ensure they are aware of all state, county and/or local/city orders, rules, moratoriums and ordinances that affect their and their tenants’ rights. As a matter of best practices, landlords are encouraged to communicate candidly with tenants and to consider negotiating payment plans, including in consultation with landlords’ lenders as applicable.
Although landlords may not be able to pursue eviction and possession of rental premise, they may initiate legal action to recover the unpaid rent once it comes due according to the deadlines set forth in the ordinances. Landlords should consult with legal counsel before taking legal action.
***The information provided in this article is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem.***