Commercial and Residential Evictions in California in the time of COVID-19 (Part 1 of 3) Updated as of: August 13, 2020
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.
As a result, residential and commercial tenants experiencing Coronavirus-induced financial pressures are asking themselves not only how they will be able to pay rent this month, but for the foreseeable future. In response, state and local leaders in California have raced to enact legislation aimed at alleviating the enormous anxiety and stress felt by residential and commercial tenants as a result of this pandemic. Additionally, most recently, the Judicial Council of California adopted 11 categories of COVID-19 emergency rules, one of which suspends nearly all evictions in California.
While the passage of these orders and rules was a good first step, a sufficient understanding of what they mean is a necessary next step.
This three-part article, originally posted on April 10, 2020 and updated here to reflect changes over the past four months, aims to provide information for landlords and tenants alike with respect to rental obligations and evictions in: California; the City of San Diego; and how the Courts are similarly addressing these issues.
Statewide California Eviction Moratorium
First, on March 16, 2020, Governor Newsom issued Executive Order N-28-20, which was essentially a nudge to local municipalities that they can (and should) enact their own eviction and/or rent moratoriums for tenants that are unable to pay rent because of COVID-19. This Order, however, would pave the groundwork for local cities and towns across the state to institute their own eviction protections.
In just a week’s time, the landscape continued to shift; namely, California issued its statewide Stay At Home Order and many national and state banks and credit unions agreed, and continue to agree, to mortgage payment deferments or assistance for business and homeowners. This shift enabled further action by Governor Newsom in the context of rent and evictions.
On March 27, 2020, Governor Newsom added his necessary first boost to his prior eviction order and issued Executive Order N-37-20. The Order prohibited landlords from evicting residential tenants for nonpayment of rent caused by COVID-19 and prohibited enforcement of eviction orders by law enforcement or courts. This protection only lasted through May 31, 2020 and the Order did not apply to commercial leases.
In the time between Executive Order N-37-20 being issued and its expiration at the end of May, hundreds of local municipalities across California began to utilize the power entrusted to them by Governor Newsom (via his first Executive Order N-28-20) and instituted their own eviction moratoriums, often applicable to both residential and commercial leases. However, the ability of local municipalities to afford tenants protection from eviction was slated to expire on May 31, 2020, pursuant to Executive Order N-28-20, Paragraph 2. In other words, local eviction moratoriums would not be able to last into June.
With California residents confronted with a looming expiration of their eviction protections, Governor Newsom first issued Executive Order N-66-20 on May 29, 2020 (extending the timeframe 60 days to July 28, 2020); and then Executive Order N-71-20 on June 30, 2020, which extended the timeframe through September 30, 2020. As a result, local governments and municipalities were given the power to extend their eviction moratoriums through September.
Assuming a tenant’s local city, town or municipality elects to extend eviction moratorium, there are still requirements that tenants must meet in order to be protected under Governor Newsom’s Order(s). Specifically, unless a local ordinance specifies otherwise, a tenant will not be protected if they do not abide by the following requirements:
- Prior to March 27, 2020, the tenant paid rent to the landlord pursuant to the lease agreement.
- The tenant notified the landlord in writing before the rent is due, or within a reasonable period of time afterwards not to exceed seven days, that the tenant needs to delay all or some payment of the rent because of an inability to pay the full amount due to reasons related to COVID-19 (examples of reasons found in the Order);
- The tenant must retain verifiable documentation explaining the tenant’s changed financial circumstances to support the tenant’s assertion of an inability to pay. The tenant is not required to submit the documentation to the landlord at the time of notice, but will be required to provide the landlord with documentation of his/her inability to pay no later than the time of payment of back rent owed.
It is important to note that the unpaid rent is not waived or excused and must still be paid to the landlord once the Order is no longer in effect. Additionally, subject to local ordinances specifying otherwise, landlords appear to still be allowed to terminate leases for non-payment and other, legal causes (e.g. serve 3-Day Notices To Pay or Quit); but, are simply banned from enforcing any evictions and removing tenants while the Order is in effect. While this ensures that those residential tenants that fall within the Order’s scope will not be physically removed from their homes during the pandemic, it does not alleviate the root problem of being unable to pay rent. Moreover, the Order does not provide any protection to commercial tenants (i.e. the thousands of businesses struggling to stay afloat.)
San Diego’s eviction moratorium, on the other hand, goes a bit further, and is addressed here.
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