We've been getting a lot of questions this month about the new eviction protection laws just passed by the CDC and in California so we wanted to to communicate the latest information. On August 31, 2020, our California state legislature and Governor Newsom took action by signing the COVID-19 Tenant Relief Act (AB 3088) into law.The purpose of this blog post is provide a summary overview of the new law and its eviction protecton aspects as it pertains to San Diego Property Management. Disclosure, we are not attorneys and are providing this post as our opinion and only our understanding of the new law. Please consult your attorney if you find yourself in any applicable scenarios.
Summary of AB 3088
AB 3088 continues protection for residential tenants with a financial hardship related to COVID-19 from being evicted until 2021 under certain circumstances. AB 3088 limits a landlord’s ability to evict a tenant for non-payment of rent due from March 1, 2020 to January 31, 2021 if the tenant has experienced a financial hardship related to COVID-19. There is a difference between how a landlord would treat rent that accrued from March 1, 2020 to August 31, 2020, (the “protected time period”) and rent that accrues from September 1, 2020 to January 31, 2021 (the “transition time period”). Even the statutory notice that needs to be served for each time period is different. Only a resident who returns a signed declaration after a pay or quit notice is served is protected. A landlord is able to evict residents who fail to return a signed declaration as of October 5, 2020.
Protected Time Period - Rent Due From March 1, 2020 to August 31, 2020:
The landlord must serve a tenant who owes then rent during the protected time period a 15-Day Notice (15 court days) to Pay or Quit, which states the exact amount of rents which are past due. The notice must include specific language and provide as an attachment a specific declaration form to fill out, sign, and return to the landlord. The declaration is to provide the landlord, under penalty of perjury, their statement if the tenant has experienced a COVID-19 financial hardship. The tenant has 15 court days to return the notice, at which time, if received, is unable to file an eviction against the tenant. The new law provides for the rent to be reclassified as “consumer debt” with the landlord's recourse being to file a small claims action against the tenant as of March 1, 2021.
Transition Time Period - Rent Due from September 1, 2020 to January 31, 2021: In the event a tenant should miss their rent payment moving forward and rent accrues from September 1, 2020 to January 31, 2021, we would be required to serve a 15-Day Notice (15 court days) to Pay or Quit. The notice must include specific statutory language and a declaration form to be completed and signed by tenant under penalty of perjury which states the tenant has experienced a financial hardship related to COVID-19. The 15-day notice must also set forth the amount of rent demanded and the date each amount became due. The tenant would have 15 court days to return the notice.
- Tenant Must Pay 25% of the Rent: residents are protected from eviction under AB 3088 as long as they (1) return the required declaration regarding a COVID-19 financial hardship and (2) pay at least 25% of the rent for each month. The 25% does not need to be paid in each month when the rent becomes due. The tenant can pay the full amount on January 31, 2021, in one lump sum in order to avoid being evicted as of February 1, 2021.
- No Eviction to Recover Remaining 75% of the Rent: If the tenant provides the signed declaration and pays at least 25% of the unpaid rent from the transition period by January 31, 2021, the landlord will not be able to file an eviction against the tenant to collect the remaining balance. Instead the remaining 75% of the rent which has accrued during the transition time period would become consumer debt, and the landlord can file a small claims action against the tenant as of March 1, 2021.
Local Ordinances: Keep in mind, AB 3088 does not supersede local ordinances. If a local ordinance was in effect as of August 19, 2020, the terms of the ordinance in place on that date will remain in effect, including the expiration of the ordinance as of that date. Any amendments or extensions made after August 19, 2020, would not take effect until February 1, 2021. So, the city of San Diego, as an example, extended their citywide eviction moratorium on June 30th. San Diego's moratorium, however, expires as of September 30, 2020. Also, a repayment period (if any) included in a local ordinance must allow for rent repayment to commence no later than March 1, 2021, and cannot allow the repayment period to stretch beyond March 31, 2022.
CDC Eviction Moratorium: You may have also heard that the CDC released a nationwide eviction moratorium of their own which takes effect today, September 4, 2020. It is unclear how this will impact AB 3088. There is language in the CDC moratorium which states that it will not apply in states or local jurisdictions that have already enacted “equal or greater” eviction protections. Governor Newsom has publicly taken the position that the CDC eviction moratorium does not apply in California because the state and local restrictions already in place are more far reaching. Although having a statement to that effect from the governor provides landlords with some level of assurance, it remains to be seen if judges will take the same position in all cases.
Proof of Inability to Pay: Many of our tenants fall into the category of high net worth individuals. Such tenants (those making over $100,000 annually) who have previously provided income verification to us for screening purposes would need to provide proof of their damage from COVID-19 beyond the declaration.
Nuisance Tenants: There is nothing in the new law that allows us to proceed with 3-day notices to evict tenants who are nuisances or otherwise breaching their lease for any reason that is not related to the failure to pay money (rent or other charges).
No Fault Evictions: No fault evictions, such as those resulting from tenants refusing to vacate following a notice to terminate at the conclusion of their lease, may not be filed until February 1, 2021.
We Will Keep you Informed!
North County Property Group is staying up to date on all of the legal nuances pertaining to San Diego Property Management and will post periodic updates as the laws are updated and change. This is why you hire a property manager!
Sources and content credit includes CAA’s Industry Insight – AB 3088 – The COVID-19 Tenant Relief Act of 2020.