Governor Newsom signed AB 3088, the "COVID-19 Tenant Relief Act of 2020.”
Shortly before midnight last night, Governor Newsom signed AB 3088, the "COVID-19 Tenant Relief Act of 2020.” https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201920200AB3088
The broad concepts, which are already receiving significant press, include:
Residential tenants do not have to immediately repay rent they missed between March and August 2020.
To be protected from eviction, tenants must pay 25% of their rent from September 1, 2020 through January 31, 2021.
—High-income renters seeking the protections under the statute will have to submit to landlord a form under penalty of perjury, declaring financial distress.
Landlords will be able to sue tenants to recover unpaid rents beginning in March 2021.
By September 30, 2020, landlords are required to give specified notices to tenants who have missed any rent payments since March 1, 2020.
A number of AB 3088’s provisions have particular relevance to purchase/sale transactions; some buyers and sellers have encountered uncertainties stemming from the statewide closure of the unlawful detainer courts since April. With the passage of AB 3088,
Any ordinance, resolution, regulation, or administrative action adopted or extended by a city, county, or city and county in response to the COVID-19 pandemic to protect tenants from eviction after August 19, 2020 is preempted by the new law.
Following passage of AB 3088, landlords can still evict tenants after expiration of fixed term leases:
Or for tenant’s failure to deliver possession in compliance with tenant’s own written notice of termination.
Or for tenant’s failure to deliver possession upon expiration of time stated in tenant’s written offer to surrender which is accepted in writing by the landlord
Or for tenant’s breach of lease covenants other than payment of rent
Or for unauthorized assigning/subletting, committing waste, tenant nuisance/disturbances, use of premises for unlawful purposes
Or where, as noted above, tenant refuses to provide rent but tenant has the finances to make the payments.
Some functions of the unlawful detainer courts will be opening right away. However:
“Before October 5, 2020, a court shall not... issue a summons on a complaint for unlawful detainer in any action that seeks possession of residential real property and that is based, in whole or in part, on nonpayment of rent or other charges.”
The Judicial Council is directed to develop filing paperwork to address the distinction above
Landlords seeking to initiate non-rent-related default actions can expect some delays stemming from implementation of the systems for distinguishing actions for nonpayment of rent from other types of alleged default.
The bottom line, when advising buyers and sellers with tenant-in-possession or seller-in-possession questions, or other questions that depend on availability of the unlawful detainer courts for ultimate resolution, remains, “Always advise your client in writing to consult with a locally knowledgeable landlord-tenant attorney to evaluate any potential risks and delays."