Governor Newsom has signed Executive Order N-08-21 which extends the time period during which local jurisdictions can prohibit the eviction of commercial tenants, through September 30, 2021. This protection was initially given pursuant to Executive Order N-28-20 back on March16, 2020 and has been extended numerous times over the last 16 months. It was set to expire on June 30, 2021 and with the state re-opening, we were hoping the governor would not initiate a further extension. Unfortunately, he has chosen to, yet again, extend the time a local jurisdiction can offer protection, through September 30, 2021.
What does this mean for you?
First, this order does NOT implement any eviction moratorium from the state level and there is NO STATEWIDE COMMERCIAL EVICTION MORATORIUM IN EFFECT. This order simply gives local jurisdictions (cities and counties) PERMISSION to extend protection to commercial tenants should they feel it necessary or appropriate. We get lots of questions asking what the rules are in various counties within Southern California. There is no simple answer as EACH CITY WAS GIVEN PERMISSION TO ENACT ITS OWN ORDINANCE. The ordinances enacted city by city are all over the board which means we have to review the ordinances enacted by each city separately to be able to answer questions. The County of Los Angeles also has its own ordinance that covers a large portion of Los Angeles County, adding yet another layer of confusion.
Most of the cities fall into one of the following categories:
A. CITIES WHO DO NOT HAVE A MORATORIUM IN PLACE:
If you have a commercial property in a city that did not enact an eviction moratorium or intentionally allowed it to expire, then it is unlikely that city will choose to enact one now or re-extend an ordinance that has already expired. Those cities will likely maintain the “status quo” and you will continue to be able to initiate eviction actions against non-paying commercial tenants.
B. CITIES WHO HAVE A MORATORIUM IN PLACE WHERE THE LANGUAGE OF THE MORATORIUM IS SPECIFICALLY “TIED TO THE GOVERNOR’S ORDER”:
If you have a commercial property in a city that has a moratorium in place and that moratorium has language that says “the expiration of the moratorium is tied to Governor Newsom’s Executive Order N-28-20 and any amendments or extensions thereof”, then that city’s moratorium will automatically be extended through September 30, 2021 without any action required by the city council. The cities who used that language (or similar language) did so in order to avoid the necessity of holding special city council meetings. They simply wait for the governor to extend his order and the city order is automatically extended. An example of a city whose moratorium includes that language is Santa Ana. There are lots of cities in SoCal who set up their moratoriums that way.
C. CITIES WHO HAVE A MORATORIUM IN PLACE WHERE
THERE IS A SET EXPIRATION DATE:
If a city has a moratorium in place with respect to commercial property and that moratorium has a specific end date, then that end date WILL apply until and unless the city council votes to extend the moratorium further. Keep in mind that the Governor has given each city permission to do what they choose to do so there is no consistency whatsoever from city to city. One city may choose to extend and another city may choose not to. In order to know what you can or cannot do, each city order has to be reviewed separately.
If the ordinance governing a city has expired, what action can you take?
It’s important to remember that any repayment terms included in an eviction moratorium SURVIVE the expiration of the moratorium. If a moratorium has expired in a city where you have a non-paying tenant, you will be able to demand payment of full rent and NNN starting the month following the expiration of the moratorium. You cannot, however, demand payment of the deferred rent. The tenant will have to repay the deferred rent BUT only as dictated by the repayment terms set forth in the moratorium governing that city. The repayment terms vary greatly from three (3) months to twelve (12) months so it is critical that each city be researched separately.