COVID-19 Tenant Relief Act of 2020

Over the past six months, there has been a flurry of different eviction moratoriums enacted by cities, counties, and even the State of California. The different local orders created a complicated framework, usually requiring an attorney to decipher which rule applied to each rental.

On Monday, August 31st, Governor Newsom signed the COVID-19 Tenant Relief Act of 2020 (AB 3088) into law. This legislation is a step towards unraveling the complicated eviction moratorium orders throughout the state and providing a uniform approach to the issue.

In reviewing the legislation, all local eviction measures that have not expired will remain in place. However, once the local measures expire, they cannot be renewed. Tenants and landlords will be forced to rely on state law.

AB 3088

Let’s take a deep dive into the COVID-19 Tenant Relief Act of 2020, or AB 3088 for short.

The centerpiece of the legislation is the eviction protection provided to tenants. Under AB 3088, a landlord is to serve a tenant, who has missed a rent payment between March 2020 and August 2020, with a 15-day notice to pay or submit a declaration stating they cannot pay their rent because of COVID-19. The landlord’s notice must outline the tenant’s rights under AB 3088, as well as provide a hardship declaration form. If the tenant submits the declaration, any back rent incurred between March 2020 and August 2020 will not have to be repaid until March 1, 2021.

Further, a tenant who submits the declaration will only have to pay 25% of their rent between September 2020 and January 2021. The 25% can be paid in one lump sum on January 31, 2021. If the 25% is not made by the January deadline, a landlord can commence eviction proceedings on February 1, 2021, for all back rent.

Keep in mind, as long as the tenant provides the declaration to the landlord, eviction proceedings are stayed from September 2020 to February 1, 2021.  However, if a tenant has not served the Landlord with the declaration, they cannot avail themselves of the protections and eviction can happen immediately.

In the event that the declaration is served on the landlord and a 25% rent payment is made by January 31, 2021, all monies owed to the landlord (including the full rent for February 2021, all back and unpaid rent) must be paid by March 1, 2021.

Other Considerations

It is worth noting that the protections under AB 3088 only apply to evictions based on unpaid rent resulting from COVID-19. A landlord can still move forward with no-fault evictions under AB 1482, as well as at fault evictions for nuisance, criminal activity, etc. The only caveat to this is that some local cities still have eviction orders in place, so check whether they have expired and are applicable.

Also, all unpaid rent is still due and owing to the landlord. AB 3088 only provides a means to delay payment to March 2021 if a tenant fulfills all the necessary requirements. Any tenant that does not pay the back rent is subject to a lawsuit brought by the landlord for said outstanding sums.

In fact, AB 3088 provides that the landlord can bring a lawsuit for all unpaid rent against the tenant in small claims court, regardless of the amount of unpaid rent. Normally lawsuits in small claims court are capped at $10,000.00. The small claims court offers an expedited proceeding and less formality (compared to other California Courts).

Lingering Questions

AB 3088 prompts additional questions: What level of proof must a tenant provide in their declaration to the landlord? The answer depends on their income. If the tenant makes more than $100,000 or earns more than 130% of the median income for the area, they must show proof that they are suffering from financial hardship due to COVID-19. Everyone else is just held to their word.

The hope is that AB 3088 will allow tenants that are suffering financial hardship to get back on their feet. Although, it appears to be doing so at the expense of landlords. 

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Tim is a licensed attorney in California and Nevada. He brings over 19 years of transactional and litigation experience to JohnHart. Prior to joining JohnHart, Tim was in private practice providing legal guidance to clients on Real Estate, financial, corporate, estate planning, and employment matters.

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