Commercial and Residential Evictions in California in the time of COVID-19 (Part 2 of 3)
Part 1 of this three-part article, which addresses Governor Newsom’s statewide eviction moratorium in California, can be found here.
City of San Diego Eviction Moratorium
On March 25, 2020, the City of San Diego[1] adopted its own temporary eviction ban when the San Diego City Council unanimously adopted Ordinance No. O-21177. The Ordinance not only halts both residential and commercial evictions through May 31, 2020, but also provides affected tenants with approximately six months to repay any unpaid rent as a result of the Coronavirus pandemic.
Like the California Order, tenants must meet specific benchmarks in order to receive the protections of the City’s Ordinance. If a commercial or residential tenant does not meet these specific benchmarks, the tenant will not be protected under the City of San Diego Ordinance and a landlord will be permitted to immediately pursue any applicable rent enforcement or eviction actions, to the extent permitted by law. Tenants must satisfy all of the following criteria:
- Unable to timely pay rent due on or after March 12, 2020;
- Tenant’s inability to pay rent is due to financial impacts related to COVID-19;
- “Financial impacts” are specifically defined as: a substantial decrease in household income for a residential tenant, or in business income for a commercial tenant, due to business closure, loss of compensable hours of work or wages, layoffs, or substantial out-of-pocket medical expenses.
- A financial impact is “related to COVID-19” if: it is caused by the COVID-19 pandemic or any governmental response to the COVID-19 pandemic, including complying with any public health orders or recommended guidance related to COVID-19 from local, state, or federal governmental authorities.”
- On or before rent due date, tenant must provide written notice to the landlord of inability to pay (e-mail or texts message is sufficient); and
- A sample letter that tenants can use to provide notice can be found at the San Diego Housing Commission’s website.
- Within one week of giving landlord notice of inability to pay, the tenant must provide landlord with documents or objectively verifiable information that the tenant is unable to pay rent because of the financial effects of COVID-19
- Examples of documentation: note or letter from employer regarding tenant’s loss or substantial reduction in employment; payroll records showing substantial loss of income due to COVID-19; bank statements that illustrate a drop in income; or other documentation that proves that tenant has not been generating the same level of income due to COVID-19.
An obvious, and significant, difference in the City of San Diego’s Ordinance relative to both Orders issued by Governor Newsom is the application to commercial tenants, in addition to residential tenants. This paves the way for struggling San Diego businesses to get a much-needed reprieve from paying rent after their income stream has been drastically reduced, or disappeared, effectively overnight.
Additionally, the City’s Ordinance also prohibits landlords from “taking any action to evict a tenant,” which is explicitly defined to include serving notices (e.g. serve 3-Day Notices To Pay or Quit), as well as charging late fees. The prohibition against serving notices is a notable difference from the statewide eviction moratorium in that service of a notice to pay rent or quit, which would very likely expire and terminate tenancies, would effectively hand tenants a ticking eviction timebomb set to go off once the Ordinance was no longer in effect.
An interesting wrinkle in the ordinance is with respect to “no-fault” evictions—evictions not based on the tenant’s actions, such as the landlord removing the property from the rental market or performing renovations. If a tenant falls within the scope of San Diego’s Ordinance, as specified above, landlords are also prohibited from pursuing a “no-fault eviction.” This would appear to be an effort to avoid landlords that my try and do and end-around the Ordinance by disguising non-payment of rent (at-fault) evictions as no-fault evictions.
Lastly, it is important to note that the City’s Ordinance does not relieve the tenant of liability for unpaid rent after expiration of the provisions this Ordinance (currently May 31, 2020). Rather, the obligation to pay rent is simply deferred for up to six months, unless the tenant moves out sooner, in which case all unpaid rent becomes due upon move out. If the rent balance remains unpaid after six months, the landlord may pursue collection and eviction remedies immediately.
In addition to the relief efforts at the state and local level to avoid to evictions, the Judicial Council of California has also endeavored to cut to the chase and suspend all evictions across the State of California for the foreseeable future, which is discussed in Part 3 of this article here along with next steps going forward.
[1] Imperial Beach, Chula Vista, San Marcos and Oceanside are also taking similar steps to shield renters from eviction.
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