COVID Tenant Relief Act

On August 31, 2020, California Governor Gavin Newsom signed AB3088 into law.  AB3088 enacted several new laws and modifications to existing laws meant to address the negative economic effects of the COVID-19 pandemic.  One part of AB3088 is known as the “COVID-19 Tenant Relief Act of 2020” (“Relief Act”).  This new set of laws enacted various rules and guidelines with the aim of protecting tenants in residential settings experiencing financial hardship as a result of the pandemic.  The Relief Act, and other provisions under AB3088 were then revised and expanded with the subsequent signing of SB91 on January 29, 2021. While the laws under the Relief Act, AB3088 and SB91 are numerous, this article will give a brief overview of the Relief Act’s effect on the unlawful detainer process (i.e., evictions), the relevant time periods affected, as well as the new informational notice disclosures required of landlords.

The applicable time period for protections under the Relief Act with regard to the inability to pay rent is referred to as the “Covered Time Period” (“CTP”).  The CTP’s duration was initially March 1, 2020 through January 31, 2021, however, the CTP was extended to June 30, 2021 by SB91. Within this now extended CTP is the “Protected Time Period” (“PTP”) spanning from March 1, 2020 through August 31, 2020, and the “Transition Time Period” (“TTP”) spanning from September 1, 2020 to June 30, 2021.

Informational Disclosures

The Relief Act requires that on or before September 30, 2020, landlords are to provide a notice in at least 12-point font, containing specific language found in the text of the Relief Act, if as of September 1, 2020, a tenant has missed one or more rental payments during the CTP. This notice provides information about the Relief Act, as well as available legal resources for tenants experiencing COVID-19 related financial distress.  An example of this notice is available here: (Sample Notice 1)

On or before February 28, 2021, landlords are required to provide a notice similar to the one discussed above, which specific language is also set forth in the text of the Relief Act, if as of February 1, 2021, a tenant has missed one or more rental payments during the CTP.   An example of this notice is available here: (Sample Notice 2)

The Relief Act requires that landlords serve these notices prior to any 15 Day Notice to Pay Rent or Quit (“15 Day Notice”) discussed below, or concurrently with the 15 Day Notice, if such notice is being served prior to September 30, 2020, or February 28, 2021 (whichever is applicable based on the period of missing rent).

Notices

If tenants miss rent payments during the CTP, the Relief Act requires that landlords now serve a 15 Day Notice, instead of the traditional 3-Day Notice to Pay or Quit.  The 15-day period for which the tenant must pay rent or vacate the premises excludes Saturdays, Sundays, and judicial holidays.

For 15 day notices served for rent owed during the PTP, the Relief Act requires that the notice must: (1) set forth the amount of rent demanded and the date each amount became due; (2) advise the tenant that the tenant cannot be evicted for failure to comply with the notice if the tenant delivers a signed declaration of COVID-19-related financial distress to the landlord on or before the date that the notice to pay rent or quit or notice expires; and (3) include a statutorily required disclosure in 12 point font, the specific language of which is set forth in the Relief Act.  An example of this disclosure is available at here: (Sample Notice 3)

For 15 Day notices served for rent owed during the TTP, the Relief Act requires that the notice include the same information as above.  However, the statutorily required disclosures for this period differ.  More specifically, the Relief Act sets forth specific language for notices provided before February 1, 2021, and for those provided after.  Examples of these disclosures are available here:  (Sample Notice 4) // (Sample Notice 5)

If a tenant owes rent for both the PTP and the TTP, the Relief Act requires that a landlord serve two separate 15 Day Notices that comply with the specific notice and disclosure requirements for each time period set forth above. 

Declaration of COVID-19-Related Financial Distress

The Relief Act requires that every 15-Day Notice served on a tenant must include an unsigned copy of a Declaration of COVID-19 Related Financial Distress (“Declaration”).  An example of the Declaration is available here: (Sample Declaration)

If a tenant fails to timely return the Declaration after being served with a 15 Day Notice, a landlord may proceed with the unlawful detainer eviction action. However, if a tenant served with a lawsuit for unlawful detainer files the Declaration with the court prior to the deadline for filing a response to the lawsuit, a hearing will be held to determine whether the tenant’s failure to timely return the Declaration in response to the 15 Day Notice was the result of the mistake, inadvertence, surprise, or excusable neglect.  If the court makes such a finding, the case will be dismissed.

If in response to a 15 Day Notice served for non-payment of rent during the PTP, a tenant returns a signed Declaration, the tenant will not be deemed to be in default of payment of rent, and therefore no unlawful detainer may proceed based on failure to pay rent during this period.

If in response to a 15 Day Notice served for non-payment of rent during the TTP, a tenant returns a signed Declaration, the landlord may not initiate an unlawful detainer action until July 1, 2021.  Additionally, if on or before June 30, 2021, the tenant makes one or more payments which total an amount equal to at least 25% of the rent demanded in the 15 Day Notice, the landlord may not initiate an unlawful detainer action.

The full amount of unpaid rent over the course of the CTP is still owed as consumer debt, regardless of a landlord’s inability to proceed with unlawful detainer proceedings should a tenant timely return the Declaration in response to a 15-Day Notice.  To recover rent unpaid during the CTP, landlords may file an action in small claims court on August 1, 2021 or thereafter. Small claims court will have jurisdiction for any action for unpaid rent during the CTP until July 1, 2025, even if the amount in dispute would normally exceed the jurisdictional limit for small claims actions.

With regard to high-income tenants who claim COVID-19 related financial distress, landlords can require such tenants to provide documentation of their lost income or increased expenses. However, landlords may only require this information if the landlord has proof of income in their possession before service of the 15 Day Notice, showing that the tenant is a high-income tenant. “High-income” is defined as having an annual household income of at least 130% of the median income, as published by the Department of Housing and Community Development (HCD) in the Official State Income Limits for 2020, for the county in which the rental property is located. 

Other Information of Note

Under the Relief Act, landlords are prohibited from applying a security deposit to satisfy any COVID-19 rental debt, or a monthly rental payment to any COVID-19 rental debt other than the prospective month’s rent, unless the tenant has agreed, in writing, to allow for such application.  Landlords may however apply the security deposit to satisfy COVID-19 rental debt after a tenancy ends.

Furthermore, if a tenant has provided a Declaration, any landlord who engages in certain activity with the intent to terminate a tenant’s occupancy without following the court eviction process, such as causing the interruption of utility services, prevention of a tenant from gaining reasonable access to the property, removal of outside doors or windows, or removal of any of the tenant’s personal property,  can be liable for damages of at least $1,000.00, but up to $2,500.00 as determined by the Court.

The information provided above is only a brief overview of some of the new rules and guidelines set forth in the Relief Act and other sections of AB3088 and SB91. The provisions of the Relief Act, and the rest of AB3088 and SB91 are extensive and complex.  Before proceeding with any action with regard to unpaid rent during the COVID-19 pandemic, landlords are strongly encouraged to consult with legal counsel.