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LEGISLATION & POLICY UPDATES

THE 411 ON SB 91:

A Rental Assistance and Eviction Moratorium Update

by Brent Kernan

On Jan. 29, 2021, Governor Gavin Newsom signed SB 91, extending California’s eviction moratorium from Feb. 1 until June 30, 2021, and allocating federal rent relief funds to struggling renters and rental property owners. Through this rental assistance program, rental property owners now have a path to recover unpaid rental debt.

Watch the COVID-19 Information, Renter Resources and Property Owner Resources pages on the EBRHA website (under the Resources tab on ebrha.com) for the latest information about this rapidly evolving topic, including how to apply for funding.

In the meantime, here are 14 things that property owners should know: 1. For Alameda County, there is a prohibition on serving any notice to quit/ vacate for nonpayment of rent until 60 days after Alameda County’s “local emergency” ends. It is likely that this prohibition supersedes application of SB 91’s 15-day notice to pay rent or surrender possession for unlawful detainers, although no determination of this conflict between local and state law has yet been ruled on by a California appellate court. Thus, if your rental property is in Alameda County, it is strongly recommended that you consult an attorney before serving any notice that includes, either express or implied, an alternative demand that the tenant vacate the unit. (See Chapter 6.120.030 Alameda County Municipal Code.)

2. Renters who pay 25% of their monthly rent from Sept. 1, 2020, to June 30, 2021, and have completed a Declaration of COVID-19 Related Financial Distress form (which owners were required to provide to qualifying renters in February) are protected from eviction. Note, renters don’t have to pay 25% each month; they have the option to make a 25% lumpsum payment by June 30, 2021. The renter will still owe the property owner all unpaid rent. (CCP 1179.03)

3. SB 91 still allows “just cause” evictions to proceed. Examples of “just cause” include a breach of a material term of a lease, causing a nuisance, criminal activity, subletting in violation of a lease and other grounds. However, it also continues to apply to all rental units, withholding certain exemptions such as for single-family houses. (CCP 1170.03.5, Civ 1946.2)

4. SB 91 still allows certain “nofault” evictions. A no-fault eviction includes: withdrawal of the property from the rental market; intent to occupy by the owner, spouse, parent, grandparent, child or grandchild; and to comply with a local ordinance, court order or other government entity resulting in the need to vacate the property. (CCP 1179.03.5, Civ. 1946.2)

5. SB 91 also extends the expiration date of prohibitions on retaliation because of COVID-19 rental debt from Feb. 1, 2021, to July 1, 2021. (SB 91 A(4))

6. SB 91 PROHIBITS: a) charging late fees, if the resident completes the Declaration of COVID-19 Related Financial Distress b) using the security deposit to cover COVID-19 rental debt c) applying a rent payment retroactively to back rent without written consent of the resident d) using unpaid COVID-19 rental debt as a negative factor when screening a prospective resident e) the sale or assignment of COVID-19 rental debt f) increasing fees to a renter or charging fees for services that were previously free

7. Federal rental assistance funds are to be paid to property owners directly. 8. Online application for rent assistance is expected to begin March 15, 2021. Both property owners and eligible households may apply for assistance.

9. The program gives first priority to those with a household income of less than 50% of AMI (area median income), second to communities disproportionately impacted by COVID-19 and third to those with a household income of less than 80% of AMI.

10. The program will pay property owners up to 80% of the rent in arrears (not total rent for the period) between April 2020 and March 2021 if the property owner agrees to forgive the remaining 20% and not pursue eviction for nonpayment or any other curable breach of the lease.

11. If they will not forgive unpaid amounts and forgo eviction, they will be paid 25% of rent in arrears between April 2020 and March 2021.

12. Subject to funding availability, qualified tenants will also be able to access funds to pay 25% of rent for April-June 2021.

13. Property owners’ access to small claims court for COVID-19 rental debt begins Aug. 1, 2021. If the owner is deemed to have refused to obtain rental assistance, the award may be reduced.

14. SB 91 also establishes a “Safe Harbor” for those housing providers that closed an amenity, such as a pool, gym or laundry facility, in response to a government or public health agency order or guidelines.

Sources: CalRHA Policy Update, Feb. 2021 and The State of California Business, Consumer Services and Housing Agency (BCSHA) COVID-19 Renter Relief Act overview (bcsh.ca.gov/covidrelief/). CalRHA advocated before the governor’s office, BCSHA and with key legislators for the shortest extension possible and for the eviction moratorium extension be tied to the establishment of a rent assistance program.

Brent Kernan is a real estate property lawyer representing rental property owners and managers in the Bay Area. He has practiced this area of law for over 20 years. He is also an EBRHA board member and a rental property owner himself.

This article is intended for general information purposes only and does not constitute legal advice. Consult an attorney prior to acting on information provided.