What Landlords Need to Know about the Covid-19 Tenant Relief Act of 2020
The Silicon Valley Investors Club is happy to have Puneet Singh talk to us about what landlords need to know about the Covid-19 Tenant Relief Act of 2020. Puneet Singh is a real estate attorney at PKS Law Group and she is a trusted SVIC partner.
On August 31, 2020, Governor Gavin Newsome signed Assembly Bill 3088, the Covid-19 Tenant Relief Act of 2020 (“CTRA”) into law. If you are a California rental owner whose tenants have been financially impacted by Covid-19, it is important that you are aware of the mandatory notices you must provide to your tenants, and the new eviction guidelines in place during the pandemic. This article will provide a brief overview of the informational notices and procedures property owners must follow for collecting past due rent and terminating a tenancy.
Informational Notices
If a tenant has failed to make one or more rental payments between March 1 and August 31 during the year 2020, their landlord must serve them with an informational notice. Rent non-payment notice may only be served after or concurrently with the informational notice, which is to be served on or before September 30, 2020. In at least 12 point font, the informational notice must contain an exact text which can be found here , providing details on the CTRA and legal resources available to tenants in need of assistance. It may be served by mail or by following service procedures specified in California Civil Code Section 1162.
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Rent Owed from March 1, 2020 through August 31, 2020
If the tenant owes rent from March 1 through August 31 of the year 2020, and the landlord wishes to collect or evict, he or she must serve the tenant with a 15 Day Notice to Pay Rent or Quit. The 15 day period must exclude Saturdays, Sundays, and judicial holidays. The notice must also include:
- The amount of rent demanded and when it became due;
- Notice that if the tenant fails to comply, they cannot be evicted so long as they deliver a signed declaration of COVID-19 related financial distress to the landlord on or before the date that the Pay Rent or Quit notice expires;
- A statutorily mandated disclosure in at least 12 point font which can be found here: AB 3088
The 15 Day Notice must also include an unsigned copy of a declaration of COVID-19 related financial distress. The declaration must include specific language required by AB 3088. Landlords may require “high-income” tenants who claim to have a COVID-19 related financial distress to provide documentation of their lost income or increased expenses. “High-income” is defined as having an annual household income of at least 130% of the median income for the county in which the rental property is located, as published by the Department of Housing and Community Development (HCD) in the Official State Income Limits for 2020.Landlords should carefully review the text of AB 3088 before requesting additional documentation.
If the tenant signs and returns the declaration to the landlord within the 15 day period, the tenant may not be evicted for nonpayment. Instead, the landlord may collect the outstanding rent in a small claims action on or after March 1, 2021. If the tenant fails to return the signed declaration within the 15 day period, the landlord may file an eviction action on or after October 5, 2020.
Rent Owed from September 1, 2020 through January 31, 2021
If the tenant owes rent from September 1, 2020 through January 31, 2021 and the landlord wishes to collect or evict, he or she must serve a 15 Day Notice containing a different statutorily mandated disclosure than that mentioned above. The 15 day period for which a tenant may pay rent or surrender possession of the property, excludes Saturdays, Sundays, and judicial holidays. The notice must also include the following:
- The amount of rent demanded and when it became due;
- 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;
- A specific disclosure in at least 12 point font which can be found here: AB 3088
The 15 Day Notice must also include an unsigned copy of a declaration of COVID-19-related financial distress. The declaration must include specific language required by AB 3088. Landlords can require “high-income” tenants who claim to have a COVID-19 related financial distress to provide documentation of their lost income or increased expenses. “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. Landlords should carefully review the text of AB 3088 before requesting additional documentation.
As before, if the tenant signs and returns the declaration to the landlord within the 15 day period, the tenant may not be evicted for non-payment, with the added stipulation that the tenant pays 25% of the rental payment due for that month by January 31, 2021. The landlord may collect any remaining balance by filing a small claims action on or after March 1, 2021. If the tenant fails to return the signed declaration within the 15 day period, the landlord may file an eviction action on or after October 5, 2020. If the tenant fails to pay 25% of the rental payment due for that month by January 31, 2021, the landlord may file an eviction action on February 1, 2021.
Properties Subject to the CARES ACT
If the rental property is subject to the Federal Coronavirus Aid, Relief, and Economic Security Act (CARES ACT), landlords must provide the tenant with a 30-day notice if terminating the tenancy for non-payment of rent. Examples of properties that are subject to the CARES ACT include those that have a federally backed mortgage or multifamily mortgage loan, or federally subsidized properties.
Local Eviction Moratoria
Various cities and counties have enacted local emergency ordinances that prohibit a landlord’s ability to serve a notice for nonpayment of rent. Landlords should also be aware of any additional procedural requirements imposed by local eviction ordinances.
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Termination of Tenancy for Reasons other than Non-Payment of Rent
Additional eviction protections have been temporarily extended to all properties through January 31, 2021. If a landlord wishes to terminate a tenancy for reasons other than non-payment of rent, they must follow the “just cause” procedures outlined in AB 1482.
Because the requirements of CTRA are complex and there are strict penalties for non-compliance, landlords are strongly encouraged to consult an attorney if they have a resident who has missed rent payments during the COVID-19 pandemic.
NOTE: This article is for informational purposes only and should not be construed as legal advice. For legal advice please contact an experienced attorney. For more information visit the PKS Law Group, P.C. at www.pks-lawgroup.com or email info@pks-lawgroup.com.
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Ms. Singh is the recipient of numerous awards including the Individual Partner of the Year Award for the 2006 and 2012 GEMM awards hosted by the Contra Costa Chapter of the California Apartment Association and the 2007 Above and Beyond Award in Public Affairs for the California Apartment Association.
- What Landlords Need to Know about the Covid-19 Tenant Relief Act of 2020 - September 27, 2020
Dear Puneet.
Thank you so much for writing this article. The Act went to effect on the day that our baby was born so understandably we have been out of pocket for the first couple weeks. Last night I was able to see this on Facebook (thanks Jordan!) and we were able to get super timely information. Thanks again!
-Jen