The California legislature and courts, as well as the United States Center for Disease Control, recently took several important actions in connection with commercial and residential evictions.

COVID-19 Tenant Relief Act of 2020

On August 31, 2020, the governor signed the COVID-19 Tenant Relief Act of 2020, codified as Sections 1179.01 through 1179.07 of the California Code of Civil Procedure (the Act).  The Act only applies to residential tenancies.  The Act bans all evictions prior to February 1, 2021 for residential tenants who did not pay their rent between March 1, 2020 and January 31, 2021 because of a financial hardship caused by COVID-19.

If a Landlord desires to commence an unlawful detainer proceeding against a residential tenant based upon the failure to pay rent during the period March 1, 2020 through January 31, 2021, a landlord must first provide the tenant a 15-day notice to pay rent or quit which must include prescribed language informing the tenant of its rights under the Act.  If the notice alleges failure to pay rent during the period from March 1, 2020 through August 31, 2020, the landlord may not evict the tenant if the tenant provides the landlord a declaration of hardship, signed under penalty of perjury, that states that the tenant has decreased income or increased expenses due to COVID-19.  If the tenant is a “high income tenant,” the landlord may request additional documentation from the tenant supporting the claim that the tenant has suffered COVID-19-related financial distress.  A “high income tenant” is a tenant with annual household income of more than the greater of $100,000 or 130% of the medium income for the county in which the tenant resides (based on information within the landlord’s possession prior to serving the 15-day notice).  If the notice alleges failure to pay rent during the period from September 1, 2020 through January 31, 2021, the landlord may not evict the tenant if the tenant provides the landlord a declaration of hardship and pays a “minimum payment” of at least 25% of the rent due by January 31, 2021.  In no event may a landlord commence unlawful detainer proceeding prior to February 1, 2021 if a tenant provides a valid declaration of hardship.  To be clear, tenants still remain liable for unpaid rent allocable to these times periods and, commencing on March 1, 2021, a landlord may bring a damages claim to collect such amounts.  A landlord may pursue claims for rent in small claims court and the Act temporarily expands small claims jurisdiction to allow claims in excess of $5,000 and in unlimited number.

Additionally, prior to September 30, 2020, all residential landlords must provide tenants who, as of September 1, 2020, have not paid one or more rental payments that came due during the period March 1, 2020 through August 31, 2020, a prescribed notice advising them of their rights under the Act.  The Act also includes provisions that protect tenants against being evicted for “just cause” if the landlord is shown to be really evicting the tenant for COVID-19-related nonpayment of rent.  The Act preempts similar local ordinances and laws enacted in response to the COVID-19 pandemic.

To afford the courts adequate time to  prepare to implement these new requirements, the Act also prohibits a court, prior to October 5, 2020, from issuing a summons on a complaint or entering a default judgment for unlawful detainer for the non-payment of rent in a residential case.

Keep in mind that eviction moratoria applicable to commercial tenancies are still effective in many municipalities and counties.

California Judicial Council Lifts Court Moratoria on Unlawful Detainer Proceedings

Additionally, effective as of September 2, 2020, the California Judicial Council, the policy-making body of the California courts, voted to end Emergency Rule 1.  Emergency Rule 1, adopted on April 6, 2020, prevented courts from issuing a summons on an unlawful detainer complaint or issuing defaults in unlawful detainer actions, except in certain narrowly defined circumstances.  Emergency Rule 1 also continued trials in any unlawful detainer action for at least 60 days.  It was originally contemplated that the rule would be effective until 90 days after the expiration of the California state of emergency, however, in light of the courts’ resiliency in resuming operations virtually, and recent actions by the California legislature to afford additional protections to residential tenants, the Judicial Council terminated the rule as of September 2. However, the ultimate authority lies with local superior courts, which have the power to create their own rules regarding unlawful detain proceedings.  Accordingly, litigants will need to check with their local jurisdictions to determine whether they are following the lead of the Judicial Council or opting for an alternative.  For example, the San Mateo Superior Court extended its largely identical restrictions through October 2, 2020.

Center for Disease Control Order

Finally, to further mitigate the spread of the disease and encourage housing stability, the Center for Disease Control issued an order effective as of September 4 that prevents residential landlords from evicting any tenant through December 31, 2020 provided that the tenant declares the following:

(1) the tenant has used best efforts to obtain all available government assistance for rent or housing;

(2) the tenant either (i) expects to earn no more than $99,000 in annual income for calendar year 2020 (or no more than $198,000 if filing a joint tax return), (ii) was not required to report any income in 2019 to the Internal Revenue Service, or (iii) received a stimulus check under the CARES Act;

(3) the tenant is unable to pay the full rent or make a full housing payment due to substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary out-of-pocket medical expenses;

(4) the tenant is using best efforts to make timely partial payments that are as close to the full payment as the individual’s circumstances may permit, taking into account other non-discretionary expenses; and

(5) eviction would likely render the individual homeless—or force the individual to move into and live in close quarters in a new congregate or shared living setting—because the individual has no other available housing options.

Tenants are still required to pay rent and observe all other terms of their lease. The order does not apply to any State or municipality with a moratorium on residential evictions that provides the same or greater protections.

The foregoing is only a summary of certain requirements of these new laws and orders. The lawyers at Carr McClellan are available to discuss how they might apply to your particular situation.