On August 31, 2020, California Governor Gavin Newsom (D) signed AB 3088 into law, providing state-wide protections for tenants and landlords in the face of the ongoing coronavirus pandemic. The safeguards extended to tenants worrying about evictions and to landlords concerned about foreclosures.
Moratorium Eviction Extended
AB 3088 limits a landlord’s ability to evict a tenant for non-payment of rent. To make use of this protection, the tenant must submit a declaration signed under oath of financial hardship due to the financial burden experienced between March 4 – August 31. A valid declaration will prevent evictions from occurring before February 1, 2021.
For hardship stemming from the coronavirus pandemic between September 1, 2020 – January 31, 2021, tenants are expected to pay 25% of expected rent to avoid eviction by January 31, 2021.
Do Tenants Pay Rent?
The expectation of rent has not been eliminated. Instead, unpaid rent cannot be the reason for eviction for tenants that have experienced financial hardship and submitted a valid declaration. Tenants will still be responsible for paying back rent to landlords, who can begin to recover their debts through a civil small claims lawsuit on March 1, 2021.
The jurisdiction of small claims courts will be temporarily expanded to allow landlords to recover unpaid rents.
Unpaid rent isn't waived under AB 3088. Instead, it's converted into consumer debt collected in small claims court as early as March 1, 2021. If a tenant cannot meet the 25% rent minimum, AB 3088 would only provide eviction protection until February 1, 2021. If a landlord attempts to use extrajudicial self-help, such as shutting off utilities, threats, or coercion, to generate an eviction, then the landlord may face penalties as high as $1,000 to $2,500.
California’s COVID-19 Tenant Relief Act Tenant Protections
The following legal and financial protections will be extended to tenants:
- The notice period for nonpayment of rent will increase from three days to 15 court days so that tenants have more time to respond to the landlord's notice to pay rent or leave.
- Hardship declaration forms must be provided with any eviction notices for a failure to pay rent.
- The hardship declaration forms provided by landlords must be provided in the language in which the rental agreement was negotiated.
- Landlords are also required to provide tenants with a disclosure explaining their rights under AB 3088.
- Expands the "just cause" protections described in AB 1482 to all tenancies, including tenancies less than one year, affordable housing, new construction, and single-family homes.
- Local ordinances that were in effect as of August 19, 2020, will remain in effect until their expiration, while future ordinances cannot undermine AB 3088.
AB 3088's protections are extended to most tenants if they sign a declaration that they've been financially impacted due to the pandemic. What constitutes "COVID-19-related financial distress" includes:
- Increased expenses due to the health impacts of the COVID-19 pandemic
- Increased childcare or eldercare responsibilities directly related to the COVID-19 pandemic.
- Loss of Income caused by the COVID-19 pandemic.
- Higher-income tenants (those whose household income is over $100,000 or with over 130% of median household income) must provide documented proof of financial loss related to COVID-19.
California’s COVID-19 Tenant Relief Act Eviction Notices
When a landlord delivers an eviction notice for failure to pay rent, a financial distress form must be provided. The tenant has 15 days to sign and return the financial distress form. The economic distress form does not cover months to come, so that the process may be repeated on a month to month basis. The declaration is signed under "penalty of perjury,” so if a tenant provides knowingly false information, they can be charged with perjury.
Lawful eviction that has nothing to do with unpaid rent caused by the coronavirus pandemic can move forward as early as September 2, 2020. That means landlords will be able to pursue:
- Eviction against nonresidential tenants
- Evictions for lease defaults stemming from reasons other than nonpayment of rent.
- Evictions for missed rent payments before March 2020
- Evictions for nonpayment of rent unrelated to the coronavirus pandemic.
- Evictions against tenants willfully damaging property.
- Evictions against tenants engaged in criminal activity.
- Evictions against tenants who violate the lease or rental agreement in other ways.
Evictions for unpaid rent will resume on October 5, 2020, for tenants that do not submit a financial distress declaration.
Evictions for reasons other than nonpayment of rent cannot be performed as retaliation against nonpayment of rent due to the coronavirus pandemic.
Individual cities may have their own eviction moratoriums, and tenant and landlord protections that may be more robust than that provided by AB 3088. For this reason, it's critical to consult both the stipulations outlined by AB 3088 and the stipulations, if any, of one's local jurisdiction.
If a locality passed a new moratorium after August 19, 2020, then it cannot take effect until February 1, 2021. Ordinances that expire before February 1, 2021, cannot be extended until February 1, 2021. Finally, if a local jurisdiction establishes its repayment period, it must begin on or before March 1, 2021.
Given the complicated nature of the law, it's advised that tenants contact an attorney if a landlord provides notice of eviction. There are many free legal aid foundations to reach out to. The Legal Aid Foundation of Los Angeles, for example, offers free legal services to over 100,000 residents of the greater Los Angeles area.
California’s COVID-19 Tenant Relief Act Landlord Protections
AB 3088 does not protect landlords from foreclosures, nor does it require banks to provide forbearance. Instead, mortgage servicers must contact borrowers before pursuing foreclosure proceedings with forbearance options.
Dual tracking, when a provider initiates foreclosure proceedings while considering loan modifications with the borrower, is also forbidden.
If forbearance is not an option for a small landlord, then the mortgage servicer must provide a written explanation. These protections extend to January 1, 2023.
Bottom Line on AB 3088
Due to AB 3088, California will keep a dramatic increase in residential evictions at bay through the early part of 2021. Although, further action by the federal government is required to ward off the true extent of the pandemic's effects.
If you have rental properties, your property manager should be able to support you in navigating the changing regulations around tenant protections. To learn more about Mynd Management's services, contact email@example.com