No one wants to evict tenants or homeowners in the COVID-19 pandemic emergency, but landlords don’t have bottomless pockets, either. There is a potential for a domino effect that may hurt property owners and renters for years to come, as evictions, bankruptcy, and defaults on mortgages ripple through the economy.
The federal government, CDC, and the State of California have enacted laws and emergency orders at varying levels of government to mitigate the effects, but there is only so much these protections can do for so long, and the veritable throng of overlapping regulations is dizzying.
The following information is for both landlords and tenants, so that all parties know their rights and in the hope that landlords, tenants, and mortgage holders will be able to negotiate compromises that benefit all parties in these trying times.
On September 1st, 2020, the CDC issued an order prohibiting the eviction of tenants under specific conditions (paraphrased from the Temporary Halt in Residential Evictions Order)
As of January 19th, 2021, this moratorium has been extended until January 31st, and the Federal Housing Administration (FHA) has extended a ban on evictions from properties with FHA-insured single-family mortgages through February 28th. But with vaccination just beginning and COVID here to stay for the time being, the situation is being reassessed daily.
Moreover, protection against eviction is not automatic: tenants are required to complete and sign a declaration of hardship under penalty of perjury and send the form to their landlord. It is highly recommended that tenants send both an email copy and hard copy by certified mail, while retaining a backup hard copy for themselves.
Everyone is being hurt by this crisis, and the hardships of tenants can translate to landlords defaulting on mortgages and a cascade that could lead to long-lasting damage to the real estate market. Landlords should document all instances of partial- or non-payment (and so should renters!), as well as any other circumstances relevant to eviction. Review the lease and take all applicable steps, pursuing all “notice and cure” provisions save for filing for eviction. As we shall cover in the next section, while the moratorium is intended to give tenants a grace period during the current crisis, which has caused widespread unemployment and other hardships, and while landlords are unlikely to be allowed to assess fees or penalties for nonpayment during this period, California law clearly states that tenants are expected to eventually repay the owed rent in full.
California has enacted a number of emergency acts and orders that extend the federal protections, including giving counties and cities latitude to enact their own extra provisions. We will not try to outline all possible local provisions here and strongly recommend consulting with a real estate attorney on your specific situation. However, we will outline the most important state-level provisions, as they clarify and amplify the provisions above. Note also that while the CARES Act, CDC Halt Order, and other provisions are federal, they will be adjudicated in state and municipal courts.
Governor Gavin Newsom declared a state of emergency in California as of March 4th, 2020, which includes an automatic cap on rent increases above 10% of the pre-pandemic amount. There is also a hold on most utility shutoffs until April 16th, 2021 (see the CPUC website). The most important state regulations, however, are laid out in the Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020 (aka AB 3088). The most important provisions are summarized below:
The rules and regulations are in constant flux, with laws and emergency orders overlapping at the federal, state, county, and city levels. In addition to the resources provided here, you can find more information at the State of California’s website HousingIsKey.com (https://landlordtenant.dre.ca.gov/), which attempts to outline the most current protections for tenants, landlords, and homeowners. See also the California Eviction Moratorium (Bans) and Tenant Protections for specific city and county provisions. The information here is meant only as rough guidelines, and even checking and double-checking the most current information can lead to confusion and uncertainty about which laws supersede the others. In addition to educating yourself in this unpredictable and dynamic time, expert advice on the up-to-the-minute state of law in your immediate area is highly recommended.
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