On Friday, January 29, 2021, Governor Gavin Newsom signed legislation SB-91 which extends the eviction moratorium that was originally set to expire on January 31, 2021. The new expiration date for the moratorium is now June 30, 2021. This brings a new set of requirements to property owners and renters facing eviction.
Prior to the extension, AB-3088 originally stated that between the months of September 2020 and January 2021, renters could not be evicted for non-payment of rent if they:
- Return a signed form declaring financial hardship due to COVID to their landlord
- Pay at least 25% of accumulated rent owed on or before January 31, 2021
The remaining 75% is not grounds for eviction, rather, it would turn into consumer debt in the tenant’s name which landlords could pursue in small claims court or through collection agencies starting March 1, 2021.
However, SB-91 extends the expiration date from January 31, 2021, to June 30, 2021, which gives renters another 5 months of protection from eviction. Now, renters cannot be evicted for non-payment of rent from the months of February 2021 to June 2021 if they:
- Return a signed form declaring financial hardship due to COVID to their landlord
- Pay at least 25% of accumulated rent owed on or before June 30, 2021
This also pushes back the date that landlords could pursue the remaining 75% of the rent in small claims court from March 1, 2021, to August 1, 2021. Again, the remaining 75% is not grounds for eviction, and can only be acquired through small claims and/or collection agencies.
The extension of AB-3088 comes with federal funding for struggling renters and landlords. SB-91 provides a rent relief program that will directly pay landlords 80% of any missing rent accrued from April 2020 to March 2021 for any tenants that apply for the program. To receive the funds, landlords must forgive the remaining 20% and agree not to pursue eviction for a certain time period after the moratorium expires. In the case that the landlord does not accept to waive the 20%, the state will only pay 25% of any missing rent.
Applications for the program will be available on the Housing Is Key website, and we can expect the state to begin accepting applications on March 1, 2021.
To renters, this extension is another 5 months of relief to those who were impacted financially by the pandemic and were facing eviction. To property owners, this means a possibility of another 5 months of no income.
Our property management division, Equitypro Management, has been reporting 95-98% rent collections, which is above the 88.6% national average according to nmhc.org.
“Many landlords were expecting an extension through the end of the year”, states eviction Attorney Michael Brennan, “Although the extension is only for another 5 months, it is expected to be extended again further than June. The reason it was only extended through June is that June is the next session for California’s budget committee.”
In review, California’s eviction moratorium has been extended to June 30, 2021. Until that date, renters could not be evicted for non-payment of rent as long as they follow the proper procedures which are stated above.
This extension is another set of regulations that property owners must comply with. Our property management division, Equitypro Management, works diligently to keep our clients knowledgeable and in compliance with local and state regulations. Contact us to find out how we can help you.
By Phillip Gonzalez, Marketing Director