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California Legislation Extends Protections for Tenants Experiencing COVID-19-Related Financial Distress; Broadens Financial Assistance for Eligible Landlords and Tenants 

by Lori Ferguson

Published: July, 2021

Submission: July, 2021

 



Key Points


  • Eviction protections that were set to expire June 30, 2021, have been extended to September 30, 2021.
  • New notice requirements took effect on July 1, 2021; additional notice requirements take effect on October 1, 2021.
  • Governmental rental assistance is now available to pay 100 percent of a qualified tenant's rent.


On June 28, 2021, California Governor Gavin Newsom signed Assembly Bill 832 into law, effective immediately. Assembly Bill 832 extends existing eviction protections set forth in the COVID-19 Tenant Relief Act (the "Relief Act"), which were set to expire on June 30, 2021. It also enacts the COVID-19 Rental Housing Recovery Act (the "Recovery Act"), which establishes new requirements for landlords. Assembly Bill 832 also broadens existing government rental assistance law, now allowing eligible tenants and landlords to obtain up to 100 percent of rental arrears accrued beginning April 1, 2020.


Neither the Relief Act nor the Recovery Act specifically exempt licensed communities and their residents from the broad definitions of "landlord" and "tenant," and some provisions of the Acts continue to be inconsistent with the laws covering RCFEs and CCRCs. Communities contemplating pursuing evictions should therefore consult legal counsel to seek guidance regarding compliance with all applicable laws.


Protections for Tenants Experiencing COVID-19-Related Financial Distress Extended until September 30, 2021


Under the existing California eviction moratorium, tenants who failed to pay amounts due during the "transition time period," September 1, 2020, through June 30, 2021, were protected from eviction if they signed and returned a COVID-19 declaration, attesting under oath that their non-payment was due to COVID-19-related financial distress. Such tenants were required to pay at least 25 percent of amounts due in notices served during that time period by June 30, 2021.


Under the amended Relief Act and the Recovery Act, the transition time period is extended until September 30, 2021. Accordingly, any tenant who timely signs and returns a COVID-19 declaration is protected from eviction for amounts set forth in an eviction notice covering amounts accrued during this time period if, prior to September 30, 2021, the tenant pays 25 percent of amounts set forth in the eviction notice. Landlords can issue subsequent eviction notices to cover unpaid amounts accruing through September 30, 2021. A tenant will have an opportunity to sign and return a COVID-19 declaration 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


Assembly Bill 832 amends the Relief Act to require special language in termination notices for non-payment served on or after July 1, 2021. The new language encourages tenants to apply for rental assistance and advises tenants of their right to avoid eviction if they pay 25 percent of amounts due in notices served between July 1, 2021, and September 30, 2021.


The amended Relief Act also requires landlords to provide, on or before July 31, 2021, all tenants who have not paid one or more rental payments that came due between March 1, 2020, and September 30, 2021, a copy of a Notice of Rights. Any termination notice served between July 1, 2021, and September 30, 2021, must be accompanied by the Notice of Rights if it was not already 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 fees due during the "COVID-19 recovery period," October 1, 2021, through March 31, 2022, must include specific language to advise tenants of their right to avoid eviction if they complete an application for rental assistance. Any termination notice that demands payment of rent and other fees due during the COVID-19 recovery period but does not meet these notice requirements will be considered defective in an eviction lawsuit.


Financial Assistance for Eligible Landlords and Tenants


Assembly Bill 832 amends the existing government rental assistance program to further support landlords and tenants. The bill provides assistance to tenants with a household income of less than 80 percent of the area median income who have been unable to pay rent or other fees accrued after March 1, 2021, due to COVID-19-related financial distress. The bill provides priority to tenants with a household income of less than 50 percent of the area median income and to tenants who are unable to pay rent or other fees accrued from October 1, 2021, through March 31, 2022.


Under existing law, landlords could apply for funding covering up to 80 percent of a tenant's unpaid rent and other fees owed from April 1, 2020, to March 31, 2021, and tenants could apply individually for funding covering up to 25 percent of the rent and other fees owed during the same period. Under Assembly Bill 832, tenants and landlords are both eligible for relief in the amount of 100 percent of rental arrears accrued starting April 1, 2020. Landlords or tenants who applied for and received partial funding under existing law can apply again to recover the balance of rental arrears. Tenants that have moved out of a residential unit but owe past balances due are eligible to apply for rental assistance.


By no later than September 15, 2021, governmental rental assistance programs must develop mechanisms for landlords, tenants, and courts to verify the status of rental assistance applications and obtain copies of determinations on any such applications.


Lawsuits for Eviction


For-cause evictions initiated on or before September 30, 2021, including for non-payment unrelated to COVID-19-related financial distress, are not prohibited under the Relief Act and may proceed, subject to local rules.


Between October 1, 2021, and March 31, 2022, landlords seeking to evict for non-payment due to COVID-19 hardship, must prove that they applied for government rental assistance. Specifically, landlords must prove that their application for government rental assistance was denied or that they properly applied for government rental assistance, but the application remained incomplete for fifteen days due to the tenant's failure to complete the tenant's portion of the application. Failure the comply with this requirement renders the lawsuit defective and subject to dismissal in court. However, this requirement does not apply to tenancies that begin on or after October 1, 2021.


Lawsuits to Recover Unpaid Rent and Other Fees


Landlords that did not receive governmental rental assistance may bring lawsuits to recover unpaid rent and other fees accrued between March 1, 2020, and September 30, 2021. However, such lawsuits cannot be brought in court, including small claims court, until November 1, 2021. When filing the complaint in court, the landlord must include documentation showing that the landlord made a good faith effort to investigate whether governmental rental assistance is available to the tenant, seek governmental rental assistance for the tenant, or cooperate with the tenant's efforts to obtain rental assistance from any governmental entity, or another third party. If the landlord refused to obtain financial rental assistance for an eligible tenant for whom funding was available, the court may reduce the damages awarded to the landlord.


 



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