COVID-19 has significantly impacted residential tenancies. Tenants are struggling to pay rent, landlords are struggling to meet their expenses, and everyone is struggling to keep up with the flood of orders regarding landlord-tenant law.
Although various orders have temporarily halted evictions, none of them relieves a tenant from the obligation to pay rent or to restrict the landlord’s ability to recover rent that is due when the orders expire. This article briefly summarizes the latest executive and court orders, and offers some practical suggestions for landlords and tenants.
Governor’s Orders Halt Evictions Through May 31, 2020
When Gov. Gavin Newsom declared a State of Emergency on March 4, 2020, his action triggered the application of Penal Code section 396(f) to residential tenancies. This penal code section provides that landlords cannot evict residential tenants for nonpayment of rent during the declared State of Emergency and, for 30 days after, or the landlord can face misdemeanor charges and fines up to $10,000.
Newsom later issued two more orders, EO N 28-20, on March 16, 2020, and EO N 37-20, on March 27, 2020 addressing landlord-tenant issues. The first order empowers local governments to stay (temporarily halt) certain residential evictions until May 31, 2020. The second order prohibits landlords from evicting tenants who can’t pay rent due to COVID-19, if tenants meet certain requirements that are described below, through May 31, 2020.
The second order also gives tenants at least an additional 60 days to answer an unlawful detainer complaint instead of the usual five days that they would have if served by personal service. It also suspends the court’s power to issue a writ of possession, which is a court order that directs law enforcement to lock evicted tenants out of the rental property.
Judicial Council’s Order Extends the Stay on Eviction Proceedings
Then, on April 6, 2020, the Judicial Council, the policy-making body for California courts, issued Emergency Rule 1, which provides, with limited exceptions, that all residential evictions filed in state courts will be stayed at least until the end of August. This rule is broader than the governor’s orders, essentially staying all evictions even if default is unrelated to a COVID-19 hardship. Specifically, the courts:
will not issue a summons for an unlawful detainer complaint;
will not enter a default for unlawful detainer, and
will set all trial dates on unlawful detainers at least 60 days after the request for trial. Trials already set on or after April 6, 2020 must be continued at least 60 days; and
this rule is in effect until 90 days after the governor declares that the state of emergency related to the COVID-19 pandemic is ended, or until amended or repealed by the Judicial Council.
There is one important exception. A residential eviction may still go forward if continuing the tenancy would adversely impact “public health and safety.” An example might be a tenant engaging in illegal activity on the premises, committing waste or permitting activity that has a detrimental impact on a neighborhood. Speak to an attorney to determine if your situation would qualify as an exception or protection under the eviction stay.
Many Local Governments Issue Eviction Protection Orders
More than 50 local governments have enacted their own eviction protection orders with varying timelines and guidance. As of the date of this article, we are unaware of any local ordinances with provisions for rent forgiveness, but many have different timetables for repayment of back rent.
For example, the City of Sacramento has notice forms available for tenants and landlords, notice timelines that differ from the emergency orders, and an extended grace period for rent repayment.
As of May 9, 2020, no local rent ordinances have been adopted by El Dorado County or any of its incorporated cities.
What Should I Do as a Tenant?
As a tenant, you should follow your local and state directives for written notice if your inability to pay rent is related to COVID-19.
You may use the protections provided by Gov. Newsom’s March 27, 2020 order if you can show (1) you were current on rent payments prior to March 27, 2020 and (2) some or all of the inability to pay is related to a COVID-19 hardship. In addition, you must:
notify the landlord in writing of the inability to pay rent no later than seven days after the rent comes due;
explain in the notification the reason for the nonpayment of rent is because of COVID-19, and
provide verifiable documentation to show the inability to pay rent is related to COVID-19. Gather documents such as termination notices, payroll or pay stubs, medical bills, doctor’s or employer’s note, bank statements to demonstrate how the failure to pay rent is related to the pandemic.
You can also consider reaching out to the landlord to discuss a grace period to pay rent, a payment plan, or a rent abatement tailored to your situation that provides greater flexibility than the state and local protections.
Note that at this time, nothing prevents your landlord from seeking unpaid rent or proceeding with an eviction after the orders expire, so plan ahead to avoid an unwanted outcome. Speak to a lawyer to find out what your options may be.
What Should I Do as a Landlord?
As a landlord, tread carefully. Before ending a tenancy, evaluate the reasons and circumstances for the eviction. Practically speaking, if you have a tenant who has otherwise performed under the lease, but now is struggling to make rent, consider reaching out first to see you can work out a solution.
If a bad tenant must go, be aware that will likely take many months to complete. In this situation, your relationship with the non-rent-paying tenant will likely sour, the property may be neglected, and ultimately, the tenant may be judgment-proof, which will prevent you from recouping the unpaid rent. Speak to a lawyer before taking action to remove a tenant or modifying a lease agreement.
Landlords may have other options and resources available them to assist during this time to defer some of the costs of rent deferment or abatement, such as:
Mortgage Payment Forbearance. Landlords with encumbered property can look to their lenders for payment forbearance. California has reached an agreement with more than 200 lenders for up to 90 days of forbearance on mortgage payments for one to four dwelling units. Longer forbearance is available under federally-owned or backed loans, i.e., FHA, VA, Fannie Mae and Freddie Mac. Landlords should also note that if they have a federally backed loan, there may be additional restrictions on evicting residential tenants.
No Late Payments on Property Taxes. A statewide order, EO-N 61-20, issued May 6, 2020, suspends late payment penalties, costs and interest for real property taxes until May 6, 2021. Many county tax collectors were already granting waivers for late payment penalties upon a written application during COVID-19. Contact your local tax collector to find out about waivers and avoiding penalties.
Homeowner's Insurance. Landlords should carefully review their existing insurance policies for loss coverage during the pandemic and make a claim if appropriate. Also, some insurance carriers are waiving late fees and providing grace periods for payment of insurance premiums for COVID-19-related economic hardships. Guidance on California’s directives to insurance carriers is available on the state insurance commissioner’s website.
Looking Ahead
Two recent bills have been introduced in the State Legislature addressing landlord-tenant issues. One, AB-1410, would have the State of California fund most or all rental payments for up to seven months where unpaid rent is due to a pandemic-related hardship. Another bill, AB-828, would introduce sweeping changes to eviction proceedings, including allowing the courts to set up repayment plans between landlords and tenants impacted by COVID-19. Neither bill has been passed yet, and whether either one will become law is uncertain at this time.
What is certain is that COVID-19 is impacting landlord-tenant relationships right now and will have lasting impacts as well. After the emergency orders are lifted, the backlog in evictions will leave many rental properties in limbo for months.
Tenants and landlords should carefully evaluate the terms in their leases and insurance coverage for protection during a pandemic and the aftermath. A knowledgeable attorney can identify issues including whether terms are legal and enforceable, whether parties can or should alter important rights or obligations, or whether a subsequent agreement will negate an existing notice to end the tenancy.
This article is general information only and is not intended to be legal advice. California landlord/tenant laws are complex, and the orders discussed above may rapidly change, even day to day. This information is only current as of May 9, 2020. For information on your situation and for updated information, consult with an attorney.
Crystal Center is a civil attorney in Placerville and handles landlord-tenant issues throughout Northern California.
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