On August 31, 2020, AB 3088, the COVID-19 Tenant Relief Act (the “CTRA”), was passed by the Legislature and signed by the Governor. For residential tenants, the CTRA prohibited an unlawful detainer action for failure to pay rent due to COVID-19-related financial hardship occurring between March 1 and August 31, 2020 (the “Protected Time Period”). Although COVID-19-related non-payment of rent during the Protected Time Period is not grounds for eviction, all rent during this time is still owed and must be paid back. Landlords were originally going to be permitted to collect this debt through small claims court beginning March 1, 2021.
Under the CTRA, during the period of September 1, 2020 through January 31, 2021 (the “Transition Time Period”), residential tenants financially affected by COVID-19 are protected from eviction provided they pay at least 25% of the rent due during this period. Tenants who fail to pay 25% of the rent due during the Transition Time Period by January 31, 2021 may be subject to eviction, unless prohibited by local ordinances.
On January 29, 2021, Governor Newsom signed into law SB 91, which extends the Transition Time Period from January 31, 2021 to June 30, 2021. Moreover, the date for landlords to collect debts related to the Protected Time Period is extended from March 1, 2021 to August 1, 2021.
Importantly, SB 91 requires Landlords to send a Notice on or before FEBRUARY 28, 2021, to tenants who, AS OF FEBRUARY 1, 2021, failed to pay ONE OR MORE rent PAYMENTS due to COVID-19 BETWEEN MARCH 1, 2020, and JUNE 30, 2021. Failure to provide this Notice may result in waiver of the right to evict or collect past due rent.
The Notice can be downloaded here.
If the Notice has been timely provided, SB 91 provides a procedure to seek unpaid rent during the Protected Time Period or the Transition Time Period, which includes providing the tenant with a 15-day notice to pay or quit along with a notice of tenant’s rights and a declaration of COVID-19-related financial distress.
Furthermore, SB 91 will use $2.6 billion in federal funds to pay landlords up to 80% of unpaid rent between April 1, 2020 to March 31, 2021, owed by qualifying tenants with COVID-19 hardships. If a landlord accepts this money, they will have to forgive the remaining unpaid rent for that period. If a landlord refuses to participate, a qualifying tenant may apply for funds of up to 25% of the unpaid rent accumulated during the period. The remaining 75% would have to be collected by the landlord through the small claims process beginning August 1, 2021.
If you have any questions regarding SB 91 or COVID-19 related eviction moratoriums in general, contact a real estate attorney now to insure you are following the proper procedural requirements.
This blog is written as of February 22, 2021. Recommendations and legal requirements are changing rapidly, so please continue to review our legal updates or review postings on relevant government websites.
All blogs on this site are for educational purposes only, do not constitute legal advice or opinion, and should not be applied to your situation, or any specific situation, without consultation with counsel. Strategy Law, LLP does not provide any legal advice concerning any matter discussed in a blog except upon formal engagement including, without limitation, execution of Strategy Law, LLP’s formal legal services agreement, and with respect to specific factual situations. No blog constitutes a guaranty, warranty, or prediction regarding the result of any legal matter discussed in the blog or any representation.
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