California Extends COVID-19 Related Residential Eviction Moratorium
California Extends COVID-19 Related Residential Eviction Moratorium
California’s statewide moratorium on eviction and foreclosures would have expired on September 1, 2020, but the Legislature passed, and Governor Newsom signed into law, a last-minute tenant protection bill, AB 3088. Though not a permanent solution, AB 3088 was enacted as a means to provide some certainty to residential landlords and tenants, while giving the State time to determine what – if any – additional relief may be needed. With this new bill – The Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020 (“the Act”) – California lawmakers hope to temporarily avert a flood of residential evictions caused by COVID-19 while they continue to pressure the federal government for more economic relief. Notably, the Act does not afford any protections for commercial unlawful detainers, which might commence beginning September 2, 2020, subject to compliance with any local ordinances in effect.
The bill preempts local tenant-protection ordinances passed by cities and counties in California. But the Act does grandfather in existing municipal ordinances until they sunset, such as locally-enacted moratoriums that protect certain commercial tenants in the cities of San Diego, Los Angeles, Oakland, and San Francisco, and the counties of San Diego, Los Angeles, Alameda, and Santa Clara. Any future local action cannot undermine this Act’s framework. The legislation does allow local jurisdictions to adopt an ordinance that requires just cause provided it does not affect rental payments before January 31, 2021.
Tenants’ Rights and Obligations:
To receive protection under the Act, a tenant must provide a declaration under penalty of perjury consistent with the legislation’s requirements detailing how they have been financially affected by the pandemic. If a tenant provides this declaration, they may not be evicted before February 1, 2021 because of rent owed and accrued due to a pandemic-related hardship or financial distress between March 1, 2020 and August 31, 2020. Hardships may consist of, among others, loss of income or increased health care, childcare, family care, or work expenses caused by COVID-19.
And if tenants pay 25% of their rent from September 1, 2020 forward and likewise provide the required hardship declaration, landlords are prohibited from evicting tenants through January 31, 2021. Tenants who earn a higher income ($100,000/year or 130% of the area median income) must provide documentation supporting their claim of financial hardship to qualify for eviction protection.
Notably the legislation forgives no unpaid rent. Tenants must still pay any rent due, but that unpaid rental amount cannot be the basis for an eviction. Starting March 1, 2021, landlords may collect rent as consumer debt in small claims court as small claims jurisdiction is temporarily expanded to allow landlords to recover these amounts, regardless of how much is owed, until February 1, 2025.
The Act’s other legal and financial protections for residential tenants include:
- An extension of the notice period for nonpayment of rent from 3 days to 15 days.
- A requirement that landlords provide hardship declaration forms in a different language if a rental agreement was negotiated in a different language.
- A requirement that landlords provide tenants with an explanation of tenants’ rights under the Act.
- Tenant protection against being evicted for “just cause” if the landlord is evicting the tenant for COVID-19 related nonpayment of rent.
Landlords’ Rights and Obligations:
The Act does not immunize landlords from foreclosures or force banks to offer mortgage forbearance. However, the legislation does extend the California Homeowner Bill of Rights protections to owners of properties with four units or less; provides new accountability and transparency provisions to protect small landlord borrowers who request CARES-compliant forbearance; and provides the harmed borrower with a cause of action.
Before landlords may pursue evictions against delinquent residential tenants, they must:
- Send notices detailing tenants’ rights under the Act; and
- Provide tenants with a hardship declaration form in the same language as the language used in the lease.
Once landlords provide tenants with these materials, tenants have 15 days to complete and return the required hardship declaration.
Beginning October 5, 2020, courts may resume issuing summons in unlawful detainer actions and process those actions.
In addition, the Act permits landlords to pursue unlawful detainer actions in these circumstances:
- Actions against nonresidential tenants;
- Evictions for lease defaults other than nonpayment of rent (e.g., causing a nuisance or property damage);
- Evictions for unpaid and accrued rental payments before March 4, 2020; or
- Evictions for missed rent payments unrelated to COVID-19.
Landlords, however, are prohibited from evicting a tenant for a reason other than nonpayment of rent in retaliation for tenants having accrued COVID-19 related rental debt.
Landlords may face increased penalties of up to $2,500 if they resort to extrajudicial self-help to evict a tenant and fail to follow court evictions processes. Examples of self-help include locking the tenant out, shutting off utilities, throwing out tenant personal property, etc.
Centers for Disease Control and Prevention (CDC) and Department of Health and Human Services (HHS) Temporary Ban on Residential Evictions:
Effective September 4, 2020 through December 31, 2020, the federal government, through the CDC, issued a temporary residential eviction moratorium nationwide to prevent the further spread of COVID-19. Like California’s AB 3088, the CDC’s Order relieves no rental or housing payment obligations or any requirements to comply with other lease terms. But the CDC’s Order restricts residential evictions through the end of 2020 if the tenant, including each adult listed in the lease or rental agreement, provides a declaration under penalty of perjury to their landlord attesting to:
- The tenant has used best efforts to obtain all available government assistance for rent or housing;
- The tenant expects to earn no more than $99,000 in annual income in 2020 (or no more than $198,000 if filing jointly); did not have to report any income in 2019 to the IRS; or received a stimulus check under Section 2201 of the CARES Act;
- The tenant cannot pay full rent due to substantial loss of income, loss of compensable hours of work or wages, layoffs, or extraordinary out-of-pocket medical expenses;
- The tenant is using best efforts to make timely partial payments that are as close to full payment as circumstances may permit;
- If evicted, the tenant would likely become homeless, need to move into a homeless shelter, or need to move into a new residence shared by others who live in close quarters because the tenant has no other housing options;
- The tenant confirms that the tenant must still pay rent and comply with other obligations in the lease agreement and understands that fees, penalties, or interest for not making timely rental payments may still be charged or collected; and
- The tenant understands that the end of the temporary halt on evictions is December 31, 2020, tenant’s landlord may require payment in full for all payments not made before and during this temporary halt, and failure to pay all amounts due may subject tenant to eviction under state and local laws.
Full text of the CDC Order can be found here: https://www.federalregister.gov/documents/2020/09/04/2020-19654/temporary-halt-in-residential-evictions-to-prevent-the-further-spread-of-covid-19