Broker Message
by David Haas
I hope this message finds you well for 2021. As widely expected, on January 29, 2021, the California Legislature passed AB 80 and SB 91, which was an extension of California’s Eviction Moratorium through June 30, 2021. The State is also proposing a new model to allocate $2.6 billion in Federal rent relief to struggling tenants and rental property owners.
The new law will implement the following:
- Extends protections of AB 3088 through June 30, 2021, including the current requirement that tenants pay 25% per month by the end of the moratorium (now June 30).
- No late fees on COVID rents if tenant provides a declaration of financial distress.
- Landlord may not apply security deposit unless resident agrees in writing.
- Landlord must apply monthly rental payment to COVID rental debt unless resident has agreed in writing to allow rental payment to be so applied.
- Landlords may not use COVID debt as a negative factor for purposes of evaluating or denying a prospective tenant.
- Small claims recovery for rental debt can be commenced on August 1, 2021.
Federal Assistance will be available for tenants and landlords. Government payments will pay landlords directly on behalf of qualified residents under the following conditions
- Landlords must agree to accept 80% of the resident’s rental arrears (April 1, 2020 to March 21, 2021) provided the landlord agrees to forgive the remaining 20%.
- If landlord refuses to participate in the rental assistance program, a resident may apply for rental arrears assistance to receive a maximum of 25% of the unpaid rental debt accumulated from September 1 to March 31, 2021.
- Pays 25% of a prospective resident for rents after March 2021 for a total of 3 months.
Assistance Allocation is prioritized towards residents with the “highest need” as follows:
- Round 1 – Households below 50% of AMI (average medium income) for 2020
- Round 2 – Residents who live in a community disproportionately impacted by COVID
- Round 3 - Households below 80% of AMI
Local municipalities have a deadline of March 15, 2021 to implement payment programs, while most are targeting for early march. We will be working with those tenants that are currently delinquent in applying for relief under this new program and will update each client accordingly.
Terminations of tenancies for any reason other than “Just Cause” are very limited at this time, and will remain so until June 30, 2021. Rent delinquencies are no longer considered “Just Cause” during the moratorium period.
We will keep you informed of any changes in the law affecting your rental. In the meantime, please feel free to contact me directly with any questions.
