COVID-19 Resources for Landlords
Last updated 4/29/20
Before you begin reading, please ensure that your rental property is not impacted by municipal or city specific rent moratoriums. If it is NOT, then state wide moratoriums apply.
Table of Contents
- COVID-19 Related legislation time line
- AB 828 Information
- City and Municipality Specific Moratoriums
- Additional Resources for Landlords
COVID-19 Related Legislation Time Line
Local Government Authorized to Halt Evictions
Governor Gavin Newsom signed an executive order which gives local governments authority to temporarily halt the enforcement of eviction orders and homeowners, and also protects citizens from utility shutoffs for those who have been affected by the Coronavirus through May 31, 2020.
The order does not state that it relieves tenants from their responsibility of paying rent or restricts the landlord from recovering rent due. Affected homeowners would also be temporarily protected from foreclosures.
The complete Executive Order can be found here: Executive Order N-28-20
Statewide Moratorium on Evictions
On March 27, 2020 Governor Newsom issues an executive order which bans the enforcement of eviction orders to renters who are affected by COVID-19. This extension of the March 17th order continues in effect until May 31, 2020 unless otherwise extended.
This order adds that landlords may not evict tenants for nonpayment of rent and prohibits the enforcement of evictions by law enforcement and courts.
What if I am already in the middle of an eviction case?
Executive Order N-37-20 gives residential tenants affected by COVID-19 who are in the middle of the eviction process an extra 55 days to respond to the summons.
The affected tenant is required to give the landlord notice in writing that he or she cannot pay rent due to affectations of COVID-19 no more than 7 days after the rent is due. The tenant would also be required to retain documentation or proof but does not immediately have to give it to the landlord in advance.
It is important to understand that this order does not waive any rent due and any rent not paid would have to be repaid in a timely manner. Tenants could be evicted after the moratorium is lifted.
CARES Act Relief for Tenants and Landlords
The CARES Act is signed into law by President Donald Trump which aims to help stimulate the economy during the COVID-19 pandemic. It is a $2 trillion coronavirus stimulus bill that, among a lot of other benefits, will help tenants and individual and multifamily borrowers (landlords).
A key piece to the Act is the Paycheck Protection Program, or PPP. It is designed to help businesses that make an effort to keep their employees on payroll instead of layoffs by offering loans if certain criteria are met. PPP, however, was not exactly designed for every landlord or property management company, especially if they have a small number of employees. So how can the CARES Act help landlords?
While most landlords most likely will not qualify for a PPP loan, they could go the Economic Injury Disaster Loan (EIDL) program route, which the CARES Act greatly extends. This program would allow the Small Business Administration (SBA) to approve loans of up to $2 million dollars at a 3.72% capped interest rate at up to 30 years. Any small business owner can apply for an EIDL if they have less than 500 employees. The CARES Act drastically reduces the EIDL program by bypassing some of the programs stricter requirements.
Other types of assistance under the CARES Act
An individual residential borrower with a federally backed loan who has been negatively impacted financially by COVID-19 may request a forbearance on their loan responsibilities. The only prerequisite is that the borrower must be current on its payments as of February 1st, 2020.
This resource for landlords will allow you to temporarily delay making your mortgage payment without having to worry about penalties such as late fees, negative credit marks or risking foreclosure or other types of legal proceedings.
In an exchange for this temporary relief for landlords, you must agree to NOT evict any of your residential tenants during any of the allowed forbearance periods.
To get more information on whether or not your rental property qualifies for relief, please visit ConsumerFinance.gov
Once you find out that your federally backed loan qualifies, you can initiate the process by contacting your loan servicer to request this forbearance. You as a landlord have a right to request a forbearance period of up to 180 days plus a one time extension of an additional 180 days. You should not need to provide any documentation other than stating that you are going through a pandemic-related hardship.
Judicial Council Adopts New Rules to Suspend Evictions and Foreclosures
In their second emergency meeting of court and branch leaders, on 4/6/20 the Judicial Council approved 11 temporary rules, some of which affect rules for evictions and foreclosures. The rules that were approved would go into affect immediately and the ones you should know about state as follows:
• Suspend the entry of defaults in eviction cases.
• Suspend judicial foreclosures
The rules go on to say that an eviction case cannot proceed while California’s state of emergency is in effect or 90 days after the emergency ends.
In other words, California courts cannot issue a summons to evict a tenant which puts a halt on all evictions. Pending trials have been delayed for 60 days, for now. Landlords must know that this does not prevent you from filing new evictions but does put a temporary freeze on evictions.
AB 828 Information
Assembly Bill 828 was introduced by assemblymen Phil Ting (D-San Francisco), Kevin Mullin (D- San Mateo County) and Senator Scott Wiener (D-San Francisco). If this bill passes it would a crushing blow to every single tenant in California but possibly crippling to small property owners. Here are some of the details of this bill.
- The bill would force landlords to cut all rents in California by 25%. This includes rental properties where tenants cannot demonstrate conditions where they cannot pay full rent amount.
- This 25% rent reduction would be in place for the next 12 months.
- It would give judges and the courts the power to modify rental agreements already in place and set rental prices.
AB 828 violates California State and Federal Constitutions while putting additional pressure on landlords and property owners
Frequently Asked Questions
Which rent memorandum do I follow? Federal, State or Local?
Can I add late rent fees to the overdue rent?
Are tenants entitled to rent reductions due to closed amenities?
Do I have to conduct maintenance or repairs during the pandemic?
What happens to eviction cases in progress?
Can we file for evictions as soon as the moratoriums are lifted?
City and Municipality Specific Moratoriums
|City of San Bernardino||Link||3/20/20|
|City of San Diego||Link||3/25/20|
|Los Angeles City||Link||4/1/20|
|Los Angeles County||Link||3/31/20|
I will try my best to keep this list as up to date as I possibly can.
*Disclaimer: This table is provided for informational purposes only. It is not to be used as legal advice. Please contact your legal counsel for your rental property specific laws.