In response to the COVID-19 pandemic, it should go without saying that California has taken a stark “pro-tenant” approach in implementing a number of protective measures narrowing the reasons why a California landlord could begin an eviction ‘for cause’ or terminate a tenancy ‘without fault.’ The battle among politicians over the usurpation one citizen’s (landlord) rights in favor of another (tenant) has raged on since the early days of the pandemic and there have been valid arguments presented on both sides of the dispute. But as the second extension of the eviction moratorium is sunsetting on September 30, 2021, the battle of words and rhetoric will have to be tabled for now and only time will be able to elucidate whether the decisions of California politicians were correct or whether there will be unintended consequences for years to come.
The attorneys at Attorneys Real Estate Group, APC have received hundreds of inquiries over the past 18 months regarding the changes in this area of the law – nuanced and otherwise; so, we thought it would be helpful to break down – in an FAQ format – some of the changes of the rules and regulations governing evictions in a post-COVID moratorium environment. What rule is changing governing evictions upon the termination of the ban? Prior to September 30, 2021, a tenant could not be lawfully evicted for non-payment of rent – so long as the tenant asserted that they had been financially impacted by COVID-19. And those
tenants who missed rent from March 1, 2020 to August 31, 2020 can still never be evicted for failing to pay as long as they presented their landlord with a Declaration of COVID-19 financial distress. Tenants who missed rent from September 1, 2020 through September 30, 2021 also cannot be evicted for that unpaid rent if they pay 25% of it and submit a hardship declaration by the end of this month. However, if the tenant does not submit the Declaration and pay 25% of their unpaid rental debt by 9/30, their landlord may proceed with an unlawful detainer (eviction) action. Aside from the two blocks of time, referenced above, all other non-payment of rent situations can now be addressed with a 3-day Notice to Pay Rent or Quit on a tenant, in which the tenant must pay 100% of the rental debt prior to the expiration of the Notice.
What about rental assistance programs? Under the new Rental Housing Recovery Act, a tenant may apply for government rental assistance to receive up to 100% of the amount due. Eligible tenants for rental relief are those who have experienced a pandemic-related financial hardship like losing work, seeing a decrease in business revenue or taking time off due to illness. Household income must be at or below 80 percent of the area median income (“AMI”). Each county in California has an established AMI. Does the landlord have additional responsibilities before bringing an eviction action? Aside from the changes implemented regarding landlord disclosure requirements, if a tenant does not pay by the end of the 3-day notice, the landlord must apply for the governmental rental assistance. There is portion of the application dedicated for landlords, and the other portion, which will be sent to the tenant to complete, shall be filled out by the tenant for the assigned agency to determine eligibility. Can a landlord seek damages for back-rent concurrent with an unlawful detainer? It is possible for a landlord to pursue an unlawful detainer action and seek damages for back rent concurrently; however, it is not permissible to do so in the same forum. The eviction action – which determines the rightful possession of the subject property – will be adjudicated in an Unlawful Detainer Court, while the damages for back rent must be initiated in Small Claims Court.
What if back rent exceeds the limit for Small Claims Court? Starting November 1, 2021, landlords can initiate a small claims action for unpaid rent no matter the amount of past due rent. Unknowns and Unintended Consequences? With any new, or emergency legislation, there is always the potential for unknown or unintended consequences. And as stated earlier in this article, only time will enable to fully understand to the breadth and depth of the impact these changes will have. For example, it is still inordinately unclear as to how many tenants are delinquent on their rent and also fall under 80% of their respective county’s AMI.
It is also unclear as to the likelihood of success in recovering back-rent in small claims court. Many tenants owe back rent in the tens of thousands of dollars which will likely render them insolvent. Further, for those landlords who were forced into forbearance because of non-payment of rent, it is unclear if there is any relief available or if there is any coming down the pike. Again, time will dtell but the sentiment around this isn’t very bullish. The information provided in this article is strictly that; informative. It is not intended to be used
or taken as legal advice. Each fact pattern is unique and there are always nuances that must be taken into consideration and analyzed prior to a complete legal analysis.
Should you find yourself in need of such analysis, or analysis regarding any other real property matter, the attorneys at Attorneys Real Estate Group, APC are here to help. With over 50 years of collective practice among the attorneys in the firm, we’re capable of handling a wide-range of issues – from transactions to litigation and in between.