August 29, 2020

Discussion: California Legislature Set to Halt COVID Related Evictions on August 31st Through AB 3088

On August 13th, the California Judicial Council amended its emergency rules to lift the statewide ban on evictions. In doing so, the Courts effectively passed the baton to the California Legislature to develop and pass a bill to address the looming eviction crisis set to erupt on September 1, 2020 when the statewide eviction ban is formally withdrawn. After weeks of drafts, negotiation and compromises between lawmakers, tenant advocates and landlord organizations, Governor Newsom has announced Assembly Bill 3088, known officially as the Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020 (the “AB 3088”). The Relief Act will be voted on in the Senate on August 31, 2020 and will need a 2/3 majority vote to pass and be sent back to the Assembly.

AB 3088 is intended to serve as a statewide eviction moratorium bill, applicable only to residential landlords and tenants. Commercial tenants will have to continue to rely on local eviction moratoriums, many of which (including San Diego) are due to expire at the end of September 2020. In large part, AB 3088 will serve as a “stop-gap” measure to address California’s eviction crisis, until the California Legislature reconvenes early next year. While AB 3088 is incredibly nuanced and detailed, the general points of the Relief Act are as follows:

For rent due between the covered period of March 1, 2020 through August 31, 2020, residential tenants cannot be evicted if they declare under penalty of perjury that they have experienced a “COVID-19-related financial distress”;
Only high income tenants (those earning 130% of the County’s median income) would be required to show proof of COVID-19-related financial distress;
For rent due between the transition period of September 1, 2020 through January 31, 2021, tenants would still be required to pay 25% of the outstanding balance, and such payment would be due by January 31, 2021;
All unpaid rent would be converted to consumer debt and residential landlords would be permitted to collect such debt in Small Claims court, beginning March 1, 2021;
The Relief Act would preempt any local ordinance, resolution, regulation, or administrative actions such that eviction moratoriums previously passed by cities and counties will be grandfathered in, but they won’t be able to pass any extensions.

To learn more about AB 3088, its specific provisions, how it may be interpreted in Courts, as well as several other interesting and related real estate topics, please check out the discussion we held (coincidentally) just hours after the Relief Act was announced.