The County of Los Angeles has extended its Moratorium and Protection of COMMERCIAL TENANTS through September 30, 2021.
As the State of California has been re-opening, most of us were not expecting the County of Los Angeles to extend its moratorium further. Unfortunately, we learned this morning that the moratorium for commercial property has been extended through September 30, 2021. We’ve put together a list of Q&A we hope will be helpful to you as we navigate yet another extension. Please keep in mind that this article covers “commercial property” only. If you have residential property, those properties are governed by the CTRA. Please seek guidance from residential counsel.
Q: What areas does the Los Angeles County Ordinance cover?
A: The county ordinance covers (a) all unincorporated areas within Los Angeles County; (b) any city within Los Angeles County that did not enact its own ordinance or whose ordinance has expired; and (c) any city within Los Angeles County that has an ordinance but whose ordinance offers “less” protection than the county ordinance. In other words, the ordinance that offers the tenant the “most” protection to a tenant is the ordinance that prevails.
Q: Is any commercial tenant exempt from the protection offered by the ordinance?
A: Yes, commercial tenants who are (a) publicly traded; (b) multi-national; (c) have more than 100 employees; or (d) are located at an airport are exempt and are not given the protection offered by the ordinance. L.A. County Guidelines, Page 5, Section 5.3.
Q: What is the Protected Time Period?
A: The ordinance went into effect on March 4, 2020 and has been extended numerous times. The most recent extension, which occurred this week, extends the moratorium for commercial property through September 30, 2021 so the Protected Time Period is now defined as March 4, 2020 through September 30, 2021.
Q: Can I evict a commercial tenant for nonpayment of rent?
A: No, tenants are protected from eviction for nonpayment provided they notify a landlord that the nonpayment is COVID related. Small tenants (1-9 employees) may self-certify. Medium tenants (10-99 employees) must provide some sort of documentation. L.A. County Guidelines, Pages 9 &10, Section 6.6 C.
Q: When will tenants be required to start paying rent again?
A: Once the ordinance expires, commercial tenants will be required to start paying full rent and NNN as of the month “after” the moratorium expires.
Q: When will tenants be required to repay the rent they deferred due to COVID?
A: It depends on the size of the tenant. Small tenants (1-9 employees) have 12 months to repay the deferred rent and the county does not require any payment terms. Medium tenants (10-99 employees) have 6 months to repay the deferred rent and are required to pay the deferred rent amount in 6 equal monthly payments starting the month after the moratorium expires. L.A. County Guidelines, Pages 12 & 13, Section 8.3 A & B.
Q: May I charge late fees?
A: No, a landlord may not assess late fees, interest or any other type of penalty on monies deferred during the Protected Time Period. L.A. County Guidelines, Page 13, Section 8.4.
Q: May I serve a notice?
A: No, notices may NOT be served for nonpayment during the Protected Time Period. L.A. County Guidelines, Page 7, Section 6.1.
Q: Can I evict a tenant for a nonmonetary breach of lease?
A: You may only terminate a commercial lease if an eviction is necessary to “reasonably protect the health and safety of the occupants or those who work nearby and if the property poses an inherent risk to human life.” L.A. County Guidelines, Pages 7 & 8, Section 6.2.
Q: What if the lease term has expired – may I choose not to renew and evict?
A: The county moratorium states “Where a lease term ends while this moratorium remains in effect, the lease term shall be extended until the moratorium ends.” For the time being, no commercial leases expire at properties that are covered by the county ordinance. L.A. County Guidelines, Page 6, Section 5.6.
Please let us know if you have any questions.
Richard L. Seide
Ellen L. Ticknor
