On Friday, Governor Newsom signed SB 91, a new bill that will use $2.6 billion in federal funds to help pay Californians’ rent. The current eviction moratorium was due to expire at the end of January and did not do enough to help property owners still struggling with trying to collect current and past due rents. The new bill, passed with bipartisan support, aims to help that situation.
Under the previous eviction moratorium legislation, known as AB 3088, tenants had until January 31, 2021 to pay 25% of all back rent due since September 1,2020. If they did not they would be subject to eviction. What SB 91 does is to extend those protections to June 30, 2021. The major difference is that the bill will use federal funds to pay property owners up to 80% of all back rent unpaid, going back to April 1, 2020. The program will cover property owners through the end of March 2021. In order to be eligible to receive the 80% funds a property owner will have to forgive the remaining 20% of all back rent due up through that same period. There are rules and stipulations for this program including income eligibility limits, noticing requirements and waiting periods.
However, this is offering something new and that is coverage for property owners. Too many of the property owners in California are “mom and pop” operators who live off of this income. Additionally, these property owners were not getting relief from lenders or the counties when it comes to loans or property taxes. It is still not clear how quickly property owners will be able to take advantage of this or how many this will help but it is a start.
On the commercial side of things, the Governor signed an order in September of 2020 that allowed local jurisdictions to extend their commercial eviction moratoriums through March of 2021. Recently, the County of Santa Barbara extended their commercial eviction moratorium through the end of March. This affects commercial properties in the unincorporated areas of Santa Barbara County. Businesses within the cities of Santa Barbara and Goleta also extended their commercial eviction moratoria through the end of March. For more information on other locations, it is advised that property owners and tenants consult their city’s website or offices.
At the end of the day, the best advice that I can give is to talk to your tenant or your property owner. The laws can be difficult to understand and it is easy to get something wrong or give the wrong notice. Be prepared to show how COVID-19 has affected your ability to pay whether through the loss of work or by other means. By keeping the lines of communication open, you can come to an agreement that works best for all sides.
Brian Johnson is the new president of the Santa Barbara Association of Realtors. He is a California licensed real estate agent and the managing director of Radius Commercial Real Estate. Brian handles all types of commercial real estate transactions, but has a special focus on multifamily investments. He can be reached at 805.879.9631 or firstname.lastname@example.org.
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