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AB 2088

How the tenant relief act affects your California rental property

AB 3088, also known as the Tenant Relief Act, was recently passed in California. This ordinance was designed to help tenants that have been affected by COVID-19 and have struggled to keep up with rent.

AB 3088: How the Tenant Relief Act Affects Your California Rental Property

Disclaimer: We are not attorneys. This is not designed to be legal advice. We always recommend that you contact your attorney about your specific properties. Our information on this topic comes from our attorneys at KTS and the California Association of Realtors. Please read the law AB3088 for more information.

What is AB 3088?

AB 3088 limits a landlord’s ability to evict a tenant for non-payment of rent due from March 1, 2020 to January 31, 2021, if the tenant has experienced a financial hardship related to COVID-19. It bans evictions for tenants who were unable to pay their rent between March 1 and August 31 due to financial hardship caused by the pandemic. It also bans evictions for those tenants through January 31, but only if the tenants pay at least 25% of their rent owed during that time. This can be paid monthly or all at once prior to January 31. You can read the full bill here.

How does the new law work?

If a tenant has not paid rent for any period between March 1, 2020, and January 31, 2021, the COVID-19 Tenant Relief Act of 2020 (“Rent Relief Law”) will allow most residential tenants to remain in the rental property through January of 2021 so long as the tenant makes a declaration under penalty of perjury that they are unable to pay their rent or meet other financial obligations because of circumstances related to the COVID-19 pandemic. Only a resident who returns a signed declaration after a pay or quit notice is served is protected. The law also extends the standard 3 days to pay rent or quit notice to 15 days. A landlord is able to evict residents who fail to return a signed declaration as of October 5, 2020.

Protected Time Period

Rent owed from March 1, 2020 to August 31, 2020 is considered the “protected time period”. If the tenant signs a declaration stating they’ve been financially hurt by COVID-19, they can’t be evicted. Their debt becomes consumer debt and the landlord can sue for a judgment starting March 1st, 2021.

Transition time period

Rent owed from September 1, 2020 to January 31, 2021 is considered the “transition time period”. If the tenant signs a declaration stating that they have been financially hurt by COVID-19, the same rules apply except the tenant must pay at least 25% of their rent by January 31st, 2021. You must sue in small claims court starting on March 1st, 2021 for the remaining 75%. The balance of the unpaid rent is still owed. The Rent Relief Law permits a claim for the unpaid rent to be brought in small claims court, beginning March 1, 2021, even if the amount at hand would otherwise be more than the small claims court limits.

Just Cause Eviction Implications

The Rent Relief Law temporarily requires all residential landlords in California to comply with the just cause eviction procedures of The Tenant Protection Act of 2019 (also known as AB 1482) in order to find a tenant guilty of unlawful detainer on or after March 1, 2020 and before February 1, 2021. This is the case even when the property would otherwise be exempt under AB 1482. However, an owner of a single-family property or condo can terminate a tenancy when they are selling the property to a buyer who will take occupancy. For issues other than nonpayment of rent, courts began hearing cases on September 2nd, 2020.

Differences Between the CDC Eviction Moratorium & AB 3088

CDC Eviction Moratorium Implications

The CDC moratorium that was declared in early September is an unprecedented event. Therefore, it is not entirely clear how their moratorium impacts California and AB 3088. Governor Newsom stated that AB 3088 is more strict than the CDC moratorium, so it takes precedent. However, that is not true in all instances. Here’s how they differ.
  • Under both ordinances, the tenant is required to return the declaration prior to any protections taking place. Once the declaration is returned, under AB 3088 the tenant is protected until January 31 so long as they pay 25% of the rent. Under the CDC moratorium, they are only protected until December 31, but are not required to pay any rent.
  • Under the CDC order tenants only need to return the declaration once; under AB 3088 landlords can require a monthly declaration. Additionally, they must provide a copy of the AB 3088 declaration to the tenant along with the 15 day notice. The CDC moratorium does not require this.
  • The AB 3088 declaration must be returned to the landlord within 15 days; the CDC moratorium can be returned at any time–even up to the lockout.
  • The CDC moratorium does not allow for any “no fault” evictions until after December 31, 2020. The only allowed reasons are as follows: breach of lease, criminal activity, behavior that threatens the health or safety of others property damage, or violation of building codes or health ordinances. Under AB 3088, there are several “no fault” reasons that can evict a tenant that are not allowed under the CDC order (removing the unit from the rental market, the owner of the property moving in, etc.) We caution landlords to evict anyone for a reason outside of the CDC provisions.
  • AB 3088 allows a landlord to ask for proof of financial hardship from high income tenants. The CDC moratorium does not.

FAQs

Depending on where the property is located, you may have a local restriction on late fees or a restriction due to CARES Act. We do not recommend charging late fees at this time.
Prior to February 1, 2021, an eviction can only be filed for “just cause” as described in AB 1482. This does NOT include non-payment of rent if they return the signed declaration they have been impacted by COVID-19. They have added some additional restrictions in cases related to demolition and substantial renovation for health and safety or when the owner is selling the property and the new owners will occupy the property. Landlords are unable to proceed with an eviction based on a Notice of Non-Renewal or a 30/60-Day Notice without cause. This provision applies to all tenancies immediately, including tenancies less than one year, affordable housing, new construction, and single-family homes.
You should still send out the mandatory disclosure as they owe a balance. You can also provide a cover letter explaining that California law requires you to provide the following notice.
Governor Newsom has publicly taken the position that the CDC eviction moratorium does not apply in California because the state and local restrictions already in place are more far-reaching. It’s unknown how judges will interpret it.
If the landlord is demanding rent that was due between March 1, 2020, and January 31, 2021, the notice has to be modified to a 15-day notice to pay rent or quit or a 15-day notice to perform covenant or quit (when demanding COVID-19 rental debt).
Yes. However, the tenant will be given the opportunity to submit a declaration within five days of receiving the summons that the failure to return the declaration to the landlord was based on mistake, inadvertence, surprise, or excusable neglect when shown at a noticed hearing. This hearing must be held separately from a normal unlawful detainer trial.
Only if the tenant is a “high-income” tenant. A high-income tenant is one that is earning more than $100,000 in household income or more than 130% of median household income, whichever is greater. Otherwise, no, additional documentation is not required.
COVID-19 related financial distress can be based on either or both a loss of income or an increase in expenses including any of the following:
  1. Loss of income caused by the COVID-19 pandemic.
  2. Increased out-of-pocket expenses directly related to performing essential work during the COVID-19 pandemic.
  3. Increased expenses directly related to health impacts of the COVID-19 pandemic.
  4. Childcare responsibilities or responsibilities to care for an elderly, disabled, or sick family member directly related to the COVID-19 pandemic that limit the tenant’s ability to earn income.
  5. Increased costs for childcare or attending to an elderly, disabled, or sick family member directly related to the COVID-19 pandemic.
  6. Other circumstances related to the COVID-19 pandemic that have reduced tenant’s income or increased their expenses.

Choose Your Next Step

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Hi friends Steve Welty, broker CEO of Good Life Property Management here to break down and simplify the very complex AB 3088, the new law out of Sacramento to help protect tenants that are experiencing a hardship due to COVID-19. So disclaimer I’m a real estate broker and property management company owner, not an attorney so please check with your legal counsel on all of this. This is just intended to be general information, try to help you simplify some of this really complex stuff. So basically AB 3088 limits the landlord’s ability to evict a tenant that has rent due from March 1st, 2020 to January 31st, 2021. If the tenant has experienced a financial hardship due to COVID-19, so how does it work? So basically the first thing it does is it breaks the rent due into two protected or two different periods. Let’s deal with the protected time period first from March 1st to August 31st. So if your tenant’s been financially hurt by COVID and signs a declaration or returns it to you, they cannot be evicted. And your debtor becomes consumer debt and the landlord can sue for a judgment for that debt starting on March 1st, 2021. And under the protected time period you first, if the tenant doesn’t pay rent, you have to serve a disclosure that lets them know of their rights under the new law. In addition to that disclosure you serve a 15-day notice. But this is a new notice that you’ll have to get from an attorney or from your property management company. And it’s actually there’s a couple of different notices. There’s a notice if your property falls under the CARES Act, which is if it’s like a federally backed mortgage or if it’s if you accept section A, things like that. And then there’s a different notice if it doesn’t fall under the CARES Act. So if it falls under the CARES Act, it’s a 30-day notice you serve that’s a pay rent or quit. So instead of the normal three, it’s 30 days. And if it’s not CARES Act, you can serve a 15-day notice. So along with your notice to pay, there’s a disclosure that tells them about their rights. And then there’s also a declaration, a blank declaration, that the tenant would need to fill out and sign and return to you. Now if it’s read they owe you after September 1st, so September 1st through January 31st, then that’s known as a transition period. And they are required to pay at least 25% of the rent by January 31st. So that’s ideally they would pay that at least monthly, but per the law they could pay it just in one lump sum a day before or I guess by January 31st, 2020. And same thing applies, you must sue in small claim score for that remaining balance of 75% owed. The eviction courts won’t hear it. And that’s for tenants that return and that signed declaration. So the other big part of this is now it makes AB remember the other law that passed not so long ago AB 1482 that was very complicated as well. That had to do with just cause eviction and landlord protection. This is pre-COVID. So that didn’t apply to houses, condos, different, it had had exclusions for like your mom, Paul landlord. Not anymore. So now under the new AB 3088, there’s just cause eviction protections basically for everyone. Now there’s I guess there’s some gray area. So check with your attorney. But what this basically means to you is you have to be very careful even when now just giving your tenant notice to not renew their lease. There has to be specific reasons. There’s only like a handful of a lot of reasons that you can give the tenant notice to terminate their lease now. So read our blog on AB 1482. We’ll put a link in the the notes below. So you can find out more about just cause and what that means. But basically it applies to all tenant seats. And so you have to be very careful. You can’t just not renew. So also be advised pay rent or quit notices. They’ve been extended. Talked about that a little bit in the I think earlier in the video from three days to 15 days or 30 days for properties under the CARES Act. And to make this all more confusing, if your local municipality has an eviction moratorium in place already, that’s more strict than that local law will prevail. Man, this is a lot. So closing, what do I do with my tenant and pay rent? Number one, you’ve got a call and attorney or you have to call a property management company to help. This is too complex. The penalties are too stiff. Talking about $100,000 in some cases for violating the CARES Act. You don’t have the forms like you don’t have the expertise. You need to call a professional either an attorney or a property manager. Now assuming you want to proceed on your own, here’s some general steps. Number one, check your local municipality and see if they have a local eviction moratorium that’s still in place. That might prevent you from doing things under the new AB 3088. See if your property falls under the CARES Act. Talk to your bank and see if it’s federally insured. Mortgage is one of the qualifiers. Three, see if your tenant qualifies as high income. I didn’t even get into that, but if your tenant qualifies as high income, there’s some additional disclosures you could have to do, but you had to need to make a decision if you want to tread in those waters. Four, serve the property disclosure to your tenant. This is due by September 30th. So any late payers to your properties, make sure you serve that disclosure to them. And after that, you just wait. You know, if your tenant’s willing to pay some money, most tenants are going to want to stay current. They don’t want bad debt. They don’t want to get sued in a small claims court. But, you know, you’re just going to have to wait if the tenant’s not paying to recover, try to recover those amounts. But hopefully, most tenants will try to pay the most that they can to make every button because we’re all in this together, right? So if you have any questions, please email me, Steve at GoodLifeMGMT.com. I’ll put it below or call our office at 8-8-207-4595. Make it a great day.

Hey guys, Adam Manley here from Good Life Property Management. Here to bring you another video today about some of the new laws that are happening here in California and nationwide. Today specifically we are going to be talking about the differences between the CDC eviction moratorium and AB 3088. So for those of you who don’t know, AB 3088, otherwise known as the Tenant Relief Act, is the eviction moratorium that the governor and some of the other legislators have passed here in California. The CDC eviction moratorium is nationwide, so it applies all across the nation and both here in California. And while the governor did say that AB 3088 is more strict than the CDC eviction moratorium, there are some ways in which they differ and we’re going to be outlining those for you guys here today. And if you want more information about the AB 3088 bill specifically, we made a very comprehensive video on it and we’ll link to it below. It’s a quick legal disclaimer before we get started on the video here. We are not attorneys. We strongly recommend that you contact an attorney to talk specifically about your property in a situation. Nothing in this video is meant to be taken as legal advice. So please contact your attorney. Our understanding and knowledge of this topic is coming from the California Association of Realtors and our attorneys at Kimball, Tyree and St. John. So the first way in which the moratoriums differ is in the protections that they provide the tenant after the signed declarations have been returned back to the landlord. So with AB 3088, the tenant is essentially protected until after January 31, 2021, as long as they’ve sent that signed declaration back to you and continue to pay 25% of the rent. And there are some additional rules about how they can pay that. They can pay it all at the last minute, some each month. So watch our other video for exact details on that. The CDC moratorium, they are protected only until 1231, 2020, but they do not have to pay any rent. So again, with the AB 3088, as long as they’re paying 25% after they’ve signed that declaration, they’re protected until 131. The CDC eviction moratorium, they are only protected until 31st of December, but they do not have to pay any rent. All right, guys, the second way in which the two moratoriums differ from each other is in how often landlords can require a signed declaration back from their tenants. So with the CDC eviction moratorium, a landlord can only require one declaration. So if the tenant signs it and sends it back, that’s it. You can’t request that they fill it out again in a few weeks or another month or anything like that. However, with AB 3088, landlords can require that the tenant submit a new signed declaration every month for their property about why they can’t pay rent or about why they’ve been affected by COVID-19. So that’s the second reason in which they differ from each other. The third way in which these two measures differ from each other are in how quickly the tenants are allowed to return the signed declaration back to the landlord. And this is a very important one. So under AB 3088, the tenant has 15 days from the time they received this notice to send it back to their landlord stating that they’ve been affected by COVID-19. However, with the CDC eviction moratorium, the tenants can actually send that declaration back at any time, even up until the point of the eviction or the lockout. And that’s a major difference between the AB 3088. So that’s a big takeaway here. All right, guys, moving into the last way in which these two measures differ from each other. And this is probably the most important way in which these two measures differ from each other. And that is surrounding the no fault or just cause eviction rules while this whole COVID situation is going on. So with regards to the CDC measure, the CDC eviction moratorium does not allow for any what are called no fault evictions until after December 31st of 2020. The only reasons in which you can evict someone under the CDC eviction moratorium are for breach of lease, some type of criminal acts or behavior that threatens the surrounding neighbors or community members, a violation of building or health codes. And that’s it. Those are the only reasons for which you can evict a tenant under the CDC eviction moratorium. However, with AB 3088, there are some additional no fault eviction reasons that you can still continue to move forward with here in California. And those are you are removing the property from the rental market or you as the owner are then moving into the property. However, we are cautioning all landlords right now against evicting any tenants in their properties for reasons outside of what are listed in the CDC eviction moratorium. So again, contact your attorney specifically, but our advice is do not try to evict your tenant unless it’s for one of the reasons outlined in the CDC eviction moratorium. So that’s it guys. That’s pretty much some of the major differences we found between the CDC eviction moratorium and AB 3088. We’re going to link the video to AB 3088 somewhere here or below this video. So that way you guys have some more detailed information on that. Thanks for watching.