California law extends protections to tenants facing financial distress from COVID-19; Expands Financial Assistance to Eligible Landlords and Tenants | Hanson Bridgett LLP
- Eviction protections that were scheduled to expire on June 30, 2021 have been extended until September 30, 2021.
- New notice requirements came into effect on July 1, 2021; additional notice requirements are effective October 1, 2021.
- Government rent assistance is now available to pay 100 percent of an eligible tenant’s rent.
On June 28, 2021, California Governor Gavin Newsom enacted Assembly Bill 832, effective immediately. Assembly Bill 832 expands existing eviction protections set out in the COVID-19 Tenant Relief Act (the “Tenant Relief Act”), which was scheduled to expire on June 30, 2021. Recovery Act ”) , which sets new requirements for landlords. House Bill 832 also expands the existing government rent assistance act, now allowing eligible tenants and landlords to get up to 100% of arrears. rent accrued as of April 1, 2020.
Neither the Relief Act nor the Recovery Act specifically exempt licensed communities and their residents from the broad definitions of “owner” and “tenant”, and certain provisions of the statutes continue to be inconsistent with the statutes covering RCFEs and CCRCs. . Communities considering evictions should therefore consult legal counsel for advice regarding compliance with all applicable laws.
Extension of protections for tenants in financial distress related to COVID-19 until September 30, 2021
Under California’s eviction moratorium, tenants who failed to pay amounts owed during the “transition period,” September 1, 2020 to June 30, 2021, were protected from eviction if they signed up. and returned a COVID-19 statement, attesting under oath that their non-payment was due to financial hardship related to COVID-19. These tenants were required to pay at least 25% of the amounts owed in the notices served during this period by June 30, 2021.
Under the amended Relief Act and the Recovery Act, the transition period is extended until September 30, 2021. Accordingly, any tenant who signs and timely returns a COVID-19 declaration is protected against eviction for the amounts set out in an eviction notice covering amounts accrued during that period if, before September 30, 2021, the tenant pays 25 per cent of the amounts indicated in the eviction notice. Landlords can issue subsequent eviction notices to cover unpaid amounts accrued through September 30, 2021. A tenant will have the option to sign and return a COVID-19 statement in response to each notice and must pay 25 percent of the amounts contained in all notices by September 30, 2021.
Special notice requirements for termination notices served on or after July 1, 2021
House Bill 832 amends the Relief Act to require special wording in non-payment termination notices served on or after July 1, 2021. The new wording encourages tenants to seek assistance rent and inform tenants of their right to avoid eviction if they pay 25 percent of the amounts due in notices served between July 1, 2021 and September 30, 2021.
The amended Relief Act also requires owners to provide, by July 31, 2021, to all tenants who have not paid one or more rents due between March 1, 2020 and September 30, 2021, a copy of a notice of rights. Any notice of termination served between July 1, 2021 and September 30, 2021 must be accompanied by the Notice of Rights if it has not already been provided during the month of July.
Special notice requirements for termination notices served on or after October 1, 2021
Under the Recovery Act, any termination notice served for non-payment of rent and other charges due during the “COVID-19 recovery period” from October 1, 2021 to March 31, 2022, must include specific language to notify tenants of their right to avoid eviction if they complete an application for rental assistance. Any termination notice that requires payment of rent and other charges due during the COVID-19 payback period but does not meet these notice requirements will be considered defective in an eviction action.
Financial assistance for eligible owners and tenants
House Bill 832 amends the existing government rent assistance program to further support landlords and tenants. The bill provides assistance to tenants whose household income is less than 80% of the region’s median income and who have not been able to pay rent or other charges accrued after March 1, 2021, due to financial hardship related to COVID-19. The bill prioritizes tenants with household income below 50% of the region’s median income and tenants who are unable to pay rent or other accrued charges from October 1, 2021 to October 31, 2021. March 2022.
Under applicable law, landlords can apply for financing covering up to 80% of a tenant’s unpaid rent and other charges due from April 1, 2020 to March 31, 2021, and tenants can individually apply for financing. covering up to 25% of the rent. and other charges due during the same period. Under House Bill 832, tenants and landlords are both entitled to 100% relief from accumulated rent arrears as of April 1, 2020. Landlords or tenants who have applied for and received partial financing under applicable law can re-apply to recover the balance of rent arrears. Renters who have moved out but owe past due balances can apply for rental assistance.
By September 15, 2021, government rental assistance programs must develop mechanisms that allow landlords, tenants and the courts to check the status of rental assistance applications and obtain copies of decisions relating to to these requests.
Prosecution for deportation
Evictions for cause initiated by September 30, 2021, including non-payment unrelated to financial hardship related to COVID-19, are not prohibited under the Relief Act and may continue, subject to local rules .
Between October 1, 2021 and March 31, 2022, landlords seeking eviction for non-payment due to COVID-19 hardship must prove that they have applied for government rent assistance. Specifically, landlords must prove that their application for government rental assistance was rejected or that they correctly applied for government rental assistance, but the application was incomplete for fifteen days due to the tenant did not complete the tenant part of the application. Failure to comply with this requirement renders the prosecution flawed and liable to be dismissed by the court. However, this requirement does not apply to rentals that start on or after October 1, 2021.
Lawsuits to recover unpaid rents and other costs
Landlords who have not received government rent assistance can sue to recover unpaid rents and other charges accrued between March 1, 2020 and September 30, 2021. However, such lawsuits cannot be brought before courts, including small claims court, before November 1, 2021. When filing the complaint in court, the landlord should include documents showing that the landlord made a good faith effort to investigate the possibility of government rent assistance for the tenant, seek government rent assistance for tenant or cooperate with tenant’s efforts to secure rent. assistance from any government entity or other third party. If the landlord refused to obtain rent assistance for an eligible tenant for whom financing was available, the court may reduce damages awarded to the landlord.