Short-term rentals have been, and continue to be, a polarizing topic among residents of many California neighborhoods. This is particularly true in the beach and vacation communities along the California coast. The proliferation of short-term rentals in these areas has led to short-term rental bans regularly springing up to curb the side effects of what many neighborhoods perceive to be mini-hotel communities. Other property owners, on the other hand, resist these bans to take advantage of the revenue stream that companies like Airbnb and VRBO have made possible. In fact, here in San Diego, a short-term rental ban that we discussed over three years ago only just recently reached an apparent conclusion via a compromise between the relevant factions.
About Chris Evans
CHRIS EVANS, ESQ.
SENIOR ATTORNEY, PARTNER
Entries by Chris Evans
Vaccines are being administered, indoor and outdoor activities are beginning to resume throughout California and it would appear that life is starting to get back to normal. Well, not quite. Before you get ahead of yourself, a litany of COVID-related protections remain in place, namely in the landlord-tenant arena. The below is a quick refresher on the state of landlord-tenant protections in California, all of which must be considered before you seek to return to business (and evictions) as usual.
Given the ongoing COVID-19 pandemic and the resulting changing legislative landscape, the state of commercial and residential evictions in California has been in what feels like a constant state of flux. Since March of this year, mandates and ordinances have been implemented at the state and local levels, rules have been adopted and withdrawn from the California judiciary, legislation was finally passed by the California legislature, and the Centers for Disease Control and Prevention (“CDC”) even chimed in in September. These changes have often led to more questions than answers.
Covid-19 Residential Eviction Protections Flow-Chart.
The COVID-19 pandemic has had a dramatic impact on real estate issues and has prompted all levels of government to enact new legislation to mitigate the impact on landlords, tenants, and banks.
As we continue to adjust to the “new normal” of a world battling the Coronavirus pandemic, previously meaningless words and phrases like the “curve,” “social distancing,” or “shelter in place” have become everyday vernacular. New directives continue to be issued that impact our daily lives and add to an already confusing landscape of do’s and don’ts. While good intentioned, the order has resulted in sudden, unanticipated changes in the way businesses can operate, if they can continue to operate at all. This has caused businesses, and the individuals they employ or once employed, to experience severe financial stress with no clear end in sight.
On March 25, 2020, the City of San Diego adopted its own temporary eviction ban when the San Diego City Council unanimously adopted Ordinance No. O-21177. The Ordinance not only halted both residential and commercial evictions through May 31, 2020, but also provided affected tenants with approximately six months to repay any unpaid rent as a result of the Coronavirus pandemic.
On April 6, 2020, the Judicial Council of California adopted 11 categories of COVID-19 emergency rules to assist California courts in a variety of respects, one of which is evictions. Pursuant to Emergency Rule 1, effective immediately, essentially all evictions and unlawful detainers are suspended. The rule prohibits any California Court from issuing a summons on any unlawful detainer complaint, as well as entering the default of any tenant in any unlawful detainer action. There is a narrow exception for actions necessary to “protect public health and safety;” however, this phrase is undefined. As originally drafted, this Rule was set to remain in place until 90 days after Governor Newsom lifts the California State of Emergency declaration.
The moment a corporation becomes insolvent, a lot can change, and fast. If the officers and directors of the company are unaware of how insolvency can transform the landscape of corporate responsibilities and duties, they run the risk of exposing themselves to liability for the corporation’s debts, even if there was no personal guaranty. For purposes of this blog article, we look at how insolvency changes (or doesn’t change) the scope of a director’s fiduciary duties to creditors.
You have likely seen the signs around town — “Neighborhoods are for Neighbors, Not Vacation Rentals.” This phrase has become the mantra of “Save San Diego Neighborhoods,” the lead organization pushing back against San Diego’s rapidly expanding short term rental market. Save San Diego is an organization fighting to stop the “illegal conversion of San Diego homes to short-term vacation rentals.” In doing so, Save San Diego has been pushing the San Diego City Council to impose significant regulations with respect to short-term rentals such as Airbnb.