Back in March, California’s Judicial Council put in place a historic ban on residential and commercial property evictions and foreclosures. This eviction moratorium was set to protect both businesses and individuals affected by the Covid-19 epidemic from eviction.
The ban received a unanimous vote and was set to be in place until Governor Newsom announced that the state was no longer in a ‘state of emergency’. This vote stood in favor of tenants and ensured that they cannot be evicted due to late, or non-payment of rent, if the tenant is affected by Covid-19. However, California’s Judicial Council have voted to rescind this ban as of 09/01/2020.
As of September, California landlords will be able to bring their tenants to court to instruct evictions and foreclosures. The possible impact of this vote has led to many city or county councils writing their own moratoriums around residential and commercial evictions, although even before the vote several cities and county’s had enacted eviction moratoriums.
Once again, these stand strongly in favor of the tenants, and are there to protect people during these hard times. The problem is that while the state has removed the moratorium around tenant evictions, each individual city/county have set their own rules around this. It is imperative that landlords understand the measures in place in their city. This will ensure that they’re protected from a legal perspective.
With that in mind, here are a few tips for residential and commercial landlords who may need to evict a tenant.
Know the rules:
The first cities to introduce a moratorium on evictions were San Francisco and Los Angeles. Since then a multitude of cities and counties have followed suit. This means that the impact of the Judicial Council’s decision varies from city to city and county to county.
Each city council or county council will have a notice of these ordinances on their website. Our first piece of advice for you would be to go onto your local city council’s website and look for a moratorium in regard to the type of property that you own (the rules are slightly different for residential and commercial property – make sure you read the right article!). If your city council’s website does not have any notice, then search the county council’s website.
(One small note, councils are releasing new ordinances on a regular basis. We advise that you keep an eye out for announcements that may impact your real estate business.)
One thing for you to bear in mind is that this is a moratorium on eviction not on paying rent. For this reason, your tenants are still obliged to pay for occupying your property. The moratoriums are also there to protect tenants against eviction for non-payment of rent due to Covid-19. But eviction for other purposes may still apply.
If you believe that your tenant is in breach of contract and that this gives you the right to reclaim your property, then please call (949) 701-3858 or email email@example.com to discuss your case with us. Learn more about our Real Estate Litigation services here.
Does this apply to your tenant?
Do not assume that your tenant is automatically protected. The moratoriums are very clear that the eviction-relief is strictly for those affected by Covid-19. If your residential tenant has been earning from their job throughout the pandemic then they do not qualify for this protection.
Similarly, if you own a commercial property and your tenant’s business has been operational throughout the last few months, then they are not eligible for this eviction protection.
It is important to investigate your tenant’s circumstances. Often this can come through a conversation with your them or dropping by their store. This can help to maintain a professional relationship with your tenant. Not just that, but it can also protect you against serving an eviction notice when your tenant is protected by the current ordinance.
In many cities, tenants are required to give notice within 30 days’ of the rent being due, explaining that they cannot pay due to Covid-19. This notice must be in writing, whether this be a text message, email, or physical letter. From here you can request evidence of this from your tenant. Some cities have stated that your tenant must provide you with this evidence within 45 days of your request. Again, you can find this information by looking at your specific city council’s website.
Residential tenants can provide you with proof that they have:
· Experienced a loss of income due to Covid-19
· Been laid off or had a reduction of work/business hours
· Had a change in financial situation
This proof can be in the form of bank statements, paycheck stubs, or a letter from their employer. As a landlord you need to keep these documents safe as they can be used as evidence should the eviction go to court in the future.
Commercial tenants must provide evidence that their business has been adversely impacted by Covid. This could be through:
· Loss of earnings
· Staff being laid off
· Contracts being terminated
An example of a city where the ordinance is unique is in San Francisco. Here, businesses are not eligible for protections if they gross more than $25million per year. If you have a large commercial tenant then you can request proof that they have not earned more than $25million in the year leading up to Coronavirus.
As mentioned, your tenant is still obligated to pay their rent. These local ordinances provide landlords the chance to reclaim the monies owed to them. Our advice around this is to put a payment plan in place with your tenant. Demanding the total funds as soon as the ordinance lifts may not be workable for your tenant. Work with them and you may find that it is easier and less stressful to get your money from your tenant.
Most cities have stated that tenants have additional time from the end of the state of emergency to pay back any owed rent. Working within this and with your tenant can help you to put together a payment plan. This can be beneficial for both of you, so that your tenant has an understanding of their outgoings, and you can figure out when you will reclaim your lost rental income.
Working with your tenant to reclaim the debt will help to build a strong and lasting relationship with them. Putting together a repayment plan can be done between yourself and the other party, or you can have a lawyer write up a legal document for you. However, in either case the agreement must be in writing.
If your tenant does not repay you after the additional time period after the state of emergency expires, then you have the right to evict them and take them to court for non-payment of rent.
Extra questions around Residential and Commercial Tenancy
What if they are in breach of tenancy?
The eviction protections are only in place against non-payment of rent. If your tenant is in breach of their obligations then you may have the right to evict them within this period.
With different rules in city and county ordinances, it is advisable to speak with legal counsel if you wish to go down this route. While you may have legitimate reasons to evict (such as an expired tenancy, physical damage to the property or subletting), there may be reasons why you cannot evict even on these grounds. It is better to be safe in a situation like this, so please call (949) 701-3858.
Can I claim interest on late payments?
This again is a question that depends on your city or county. Several ordinances prohibit the assessment of late fees during the moratorium, and others even impose civil penalties for assessing late fees.
If you are in an area that does not comment on this, and you are looking to impose late payment charges, then speak with your legal counsel for advice before contacting your tenant. This is to both protect you legally and protect your professional relationship with your tenant. Email firstname.lastname@example.org to speak to us today for a free initial consultation.
Want to know more about your landlord rights in California?
The recent overturn of the ban on evictions has become very complicated. With each city/county having different moratoriums in place, this has confused a lot of people – tenants and landlords alike. If you need representation to guide you through reclaiming your property or ensuring that rent arrears are paid, then contact us as real estate lawyers we can help you through every aspect of the process. advice. We offer a free initial consultation where we diagnose your problem and help to put a solution in place.