Good news for tenants and good and bad news for property owners. California has extended the state’s eviction moratorium through June 30, 2021 under legislation signed by the governor in January. The governor’s office claims California has the strongest renter protections in the nation.
The legislation provides financial relief to small property owners who need helping paying mortgages, funded by $2.6 billion in federal stimulus money, according to the governor’s office. It continues to pause tenant evictions for those who declare they can’t pay all or part of the rent due for a COVID-related reason. Tenants are still obligated to pay rent, but lack of payment can’t be a reason for eviction, even after the moratorium ends.
Legislation Includes Additional Tenant Protections
Tenants who didn’t pay due to COVID-related financial problems from March 1 to August 31, 2020, are protected from eviction for missing rent for that period. If they fail to pay from September 1, 2020, to June 30, 2021, tenants are protected from eviction if they pay at least a quarter of what’s due during that time frame by June 30, 2021. Property owners can later seek payment of the unpaid fees, with some restrictions. For cause evictions, including for non-payment of rent for reasons unrelated to COVID-19, are allowed and may proceed, subject to local rules.
Landlords can’t charge or try to collect late fees for rental debt due to the tenant’s COVID-related financial issues. Increased fees can’t be charged to tenants who sign a COVID declaration nor can there be fees for previously free services. Landlords can charge fees for new services. If a service or amenity is temporarily reduced or permanently ceased due to compliance with federal, state, or local public health orders or guidelines, it won’t be considered a breach of a lease agreement by the landlord.
The legislation largely bans the sale or assigning rental debt accrued from March 1, 2020, through June 30, 2021, through the end of the moratorium. This prohibition is permanent for rental debt of those at or below 80% of area median income who meet the program’s requirements. Property owners and other housing providers can’t use COVID-19 related debt as a negative factor when evaluating a housing application or as a reason to refuse to rent to a tenant who’s otherwise qualified.
Help for Landlords Willing to Take a Discount
A State Rental Assistance Program will allocate $2.6 billion in federal aid. It will target income-qualified tenants most at-risk with unpaid back rent. Help will also be offered to landlords who agree to forgive 20% of unpaid rent. Those who do will be eligible for 80% in rent reimbursements for amounts due from April 1, 2020, to March 31, 2021.
California government will directly administer $1.5 billion through contractors. Local governments can work with the state or create their own programs. The State Rental Assistance Program started taking property owner and tenant applications this month.
Property Owners Can Pursue Legal Actions Within Limits
Effective July 1, 2021, landlords who didn’t get financial assistance through the state program may sue to recover rent and other fees that were unpaid between March 1, 2020, and June 30, 2021. Legal action in small claims court must wait until August 1, 2021. Property owners would need to include documents showing they:
- Made a good faith effort to see if governmental rental assistance was available to the tenant
- Sought governmental rental assistance for the tenant, or
- Cooperated with the tenant’s efforts to get rental help from a government agency or a third party
If the landlord refused to get rental assistance for an eligible tenant for whom funding was available, the court can reduce the damages awarded to a landlord with a successful claim.
We’re Here to Help
If you’re a landlord or tenant who has questions about the latest COVID-related California laws or funding, call my office at (949) 244-4207 or fill out our contact form today. We can talk about your situation, how this might work for you, and your best options moving forward.
