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SB 91

COVID-19 Relief For California Landlords and Tenants

Perhaps one of the most important new laws for 2021, SB 91 went into effect on January 29th by Governor Newsom. This bill is designed to assist landlords and tenants throughout the state of California that have been financially impacted by COVID-19. Prior to this bill, AB 3088 was in place to achieve a similar goal. However, those provisions were set to expire on January 31st, 2021. SB 91 expands on these provisions and extends further aid to those affected.

SB 91: COVID-19 Relief for California Landlords and Tenants

Video Transcript
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 SB 91 for more information.

What is SB 91?

SB 91 was signed into law to extend many of the provisions already outlined in AB 3088. AB 3088, also referred to as The Tenant Relief Act, forbade landlords from evicting tenants that experienced a financial hardship related to COVID-19, submitted a declaration stating so, and paid 25% of their rent from September 1, 2020 to January 31, 2021. This eviction moratorium was set to expire on January 31, 2021. However, SB 91 now states that the eviction moratorium will now be extended to June 30, 2021. Tenants are still responsible for paying unpaid amounts to landlords, but these unpaid amounts cannot be the basis for an eviction, even after the moratorium ends. It also requires landlords to send out a new disclosure by February 28, 2021.

How does SB 91 modify AB 3088?

Outside of the eviction moratorium extension, you may recall that there was something called a “transition time period” in AB 3088. This period is defined as rent owed from September 1, 2020 to January 31, 2021. Tenants will still be protected so long as they return the required declaration regarding a COVID-19 financial hardship and pay at least 25% of the rent for each month from September 1, 2020 to June 30, 2021. This is the newly extended “transition time period.” The 25% doesn’t need to be paid each month on the rent due date; a tenant can pay the entire 25% due on June 30, 2021 in one lump sum in order to avoid being evicted starting on July 1, 2021. SB 91 still allows landlords to request documentation from high income tenants proving that they have in fact been affected financially by COVID-19.

Additionally, AB 3088 required a notice to be sent to any tenant that had missed a rent payment from March 1, 2020, to August 31, 2020. SB 91 states that a new disclosure must be sent to any tenant that missed a payment from March 1, 2020 to present day. This disclosure must be provided by February 28, 2021. SB 91 also requires landlords to use a new Pay or Quit Notice as of February 1, 2021 when demanding payment of transition time period rent from that date forward. Discontinue use of the previous notices for the transition period, as they are no longer valid as of February 1, 2021. Notices demanding protected rent (from March 1, 2020 to August 31, 2020) remain the same. Note: some properties may fall under the federal CARES Act. While the CARES Act expired on July 25, 2020, the 30-Day notice requirement needed to terminate a tenancy after the eviction moratorium expires does not include an expiration date. As a result, the conservative approach is to serve a 30-Day Notice instead of the 15-Day Notice.

Small claims court filings have also been pushed back to August 1, 2021. If the tenant provides their signed declaration and pays at least 25% of the unpaid rent from the transition period by June 30, 2021, the landlord will not be able to file an eviction against the tenant to collect the remaining balance. Instead, the remaining portion of the rent which has accrued during the transition time period becomes consumer debt and the landlord can file a small claims action.

What is the rental assistance program?

A big part of SB 91 is establishing a new rental assistance program. This program has been allocated 1.5 billion dollars to assist those affected financially by COVID-19. These funds will be given to The California Housing and Community Development Agency (HCD) to distribute. A portion of these funds (approximately $150 million) must be given to counties with populations under 200,000. The remaining amount will be set aside as block grants for other counties and cities.

Rental assistance will be prioritized first to households whose income is below 50% of area median income. Round two priority is allotted to communities that have been disproportionately impacted by COVID-19. Round three will be prioritized for households with income less than 80% of area median income. The rental assistance program will begin accepting applications from property owners and tenants on March 15, 2021.

Eligibility for this new program is outlined as such: At least 1 household member must qualify for unemployment benefits OR must have suffered total or significant income loss or experienced financial hardship caused by COVID-19. Additionally, at least 1 household member must show high risk of becoming homeless by demonstrating they have past due utilities or have an eviction notice or having unsafe living conditions. Lastly, the total household income must be less than 80% of the local median.

One of the main benefits of SB 91 is that landlords will also receive assistance from the government. If the landlord waives 20% of their tenant’s unpaid rent, they will receive up to 80% of the unpaid rent from April 1, 2020 to March 31, 2021. If a landlord refuses to accept the 80% payment, they can only receive up to 25% of the rent, at which point the remaining 75% of the rent will be converted to consumer debt and the landlord can file a small claims case to collect the balance as of August 1, 2021.

What are some of the new tenant protections under SB 91?

No Late Fees

SB 91 prohibits late fees from being charged between March 1, 2020 to June 30, 2021 for tenants who have submitted their declaration. It also forbids the landlord from charging a tenant new fees for services previously provided by the landlord or from increasing existing fees for services which have already been in place.

Security Deposits

During the tenancy, the landlord cannot use the security deposit to satisfy unpaid rent payments. Once the tenant vacates, the security deposit can be used for unpaid rent.

Just Cause Eviction Protections

An eviction can only be filed for “just cause” as outlined in AB 1482 prior to July 1, 2021. This applies to all tenancies (even if not otherwise subject to AB 1482), including tenancies in effect for less than one year, affordable housing, new construction, and single-family homes. Previously, under AB 3088 and now under SB 91, this only adopts the just cause reasonings. It does not adopt anything else on the bill (such as rent caps or moving costs).

Protection for Applicants

SB 91 forbids landlords from disqualifying an applicant because of financial hardship related to COVID-19. If the applicant is otherwise qualified for the property, they must be treated fairly. If the applicant declared COVID-19 related hardship with their previous landlord, this too cannot be discriminated against.

Rental Debt Protections

If a tenant has been declared financially affected between March 1, 2020 and June 30, 2021 AND they have a household income that is below 80% of the area median income, the landlord is permanently forbidden from assigning or selling the rental debt to the tenant. For all other residents whose household income is above 80% area median income, landlords are prohibited from selling or assigning COVID-19 rental debt until July 1, 2021.

How does SB 91 coincide with the CDC eviction moratorium?

The CDC has extended their eviction moratorium to June 30, 2021. Under the CDC order, tenants need to provide a signed copy of the CDC declaration. At that point, depending on the basis for the eviction (likely non-payment of rent), the tenant would be protected until June 30, 2021. This moratorium does not cover evictions related to violating the lease, nuisance, or illegal activity.

How does SB 91 help landlords?

Unlike AB 3088, SB 91 has a provision to assist landlords. If the landlord is willing to forgive 20% of rent owed by the tenant, up to 80% of the remaining unpaid rents will be paid to them by the state. If they do not want to forgive that 20%, the max amount the state will provide to the landlord will not exceed 25%.

SB 91 FAQs

The eviction moratorium is set to end on June 30, 2021. 

If you have been financially impacted by COVID-19, you cannot be evicted for that reason, even after the moratorium ends. You are still responsible for unpaid rent.
Yes. A landlord can request additional documentation from high income tenants to prove that they have been financially impacted by COVID-19.
The new disclosure must be provided to tenants by February 28, 2021.
  • At least 1 household member must qualify for unemployment benefits OR must have suffered total or significant income loss or experienced financial hardship caused by COVID-19.
  • At least 1 household member must show high risk of becoming homeless by demonstrating they have past due utilities or have an eviction notice or having unsafe living conditions.
  • The total household income must be less than 80% of the local median.

You can apply starting March 15, 2021. 

If a landlord agrees to waive 20% of the tenant’s unpaid rents, they will receive the remaining 80% in assistance from the state. If they do not agree, the maximum amount they can provide is 25%.
No, not while they are a tenant. Once the tenant vacates, it can be used for this purpose.
Yes. The program will require landlords and tenants to work together since eligibility for funds are based on the financial situation of the tenant.
Yes. The just cause rules apply until July 1, 2021. These just cause guidelines have been expanded to include all properties, even ones that were previously excluded via AB 1482 (single family homes and new construction).
Yes. If the tenant ignores the 15-day notice, they are subject to an unlawful detainer being filed against them. However, local government protections and the CDC moratorium affect this as well. We highly suggest consulting with your attorney before proceeding.
Technically, yes. However, SB 91 states that you cannot increase fees that were previously in place or add new fees for things that were already provided.
No. SB 91 prohibits this action until July 1, 2021. After that, the ban is partially lifted. If the tenant met all requirements outlined in the Rental Assistance Program, then the ban is permanent. For all other tenants, it is lifted.

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Hey guys, Adam Manley here from Good Life Property Management. Here today to talk to you guys about SB 91, the recent piece of legislation that passed here in California that addresses COVID-19 relief for landlords and tenants. There is quite a bit to go over in this bill, so we’re going to jump right into it, but before we do, I wanted to make a quick legal disclaimer here. We at Good Life are not attorneys. This is not meant to be legal advice. This information was given to us by our attorneys, and we strongly recommend that you speak with an attorney about your specific property or situation with regards to some of the stuff in SB 91. So we’re going to get right into it and stay tuned. All right guys, so as I mentioned, we got a lot to cover in today’s video. I’m going to break down some of the different aspects of SB 91 and what we’re going to be covering today. So first thing we’re going to go over is what actually is SB 91. Second thing we’re going to be looking at is how does SB 91 actually modify the bill it was meant to build on, which is AB 3088. We’re then going to look at the rental assistance program portion of the bill. There’s a lot to go over there as well. We’re also going to look at some of the new tenant protections that SB 91 has granted. We’re going to look at also how the CDC, Viction Moratorium and SB 91 coincide and how they differ. And then we’re also going to look at, last but not least, how SB 91 actually helps landlord. So like I said, quite a bit to go over. We’re going to jump right into the first part of our video, which is what is SB 91. All right guys. So what is SB 91? So SB 91 is a bill that was recently put into law here in California in late January of 2021. And SB 91 was really meant to build on a lot of the legislation that was already in AB 3088. It extends some additional tenant protections. It also extends the current eviction moratorium here in California to now June 30th of 2021. And it also requires an additional disclosure be sent to tenants that have been affected financially by COVID-19. So a lot of different parts of the bill. That’s a little bit kind of the background of it. And we’re going to dive into some of the more details of the different aspects of the bill. What’s new and what isn’t? Now we’re going to be looking at how SB 91 modifies AB 3088. So the first thing I want to talk about is the extension of what was previously known as the transition time period. We have more information about exactly what this is in our AB 3888 video. So look at that for more detailed information on exactly when the transition time period was. But part of SB 91 is that it actually is now going to extend that transition time period out to June 30th of 2021, which kind of coincides with the eviction moratorium date as well. The second thing it also builds on is that tenants who still continue to pay 25% of their rent are still protected under SB 91. And they still have that option to pay 25% of the rent each month or make that lump payment on June 30th. So if your tenant has, if you’ve come to an agreement with your tenant about the 25% each month or if they have mentioned that they’re going to pay it in one lump sum, they’re still technically protected under SB 91. One of the other things that modifies is that landlords are still able to request income verification for high income tenants. So that’s something that actually hasn’t changed in SB 91. Another way SB 91 modifies AB 3088 is with the new disclosure notice that is required for landlords to send to tenants. So this new form, this new disclosure form is required for any tenants who have missed rent payments during the original protected time period. You need to send this notice to your tenants no later than the end of the month by February 28th of 2021. Another modification SB 91 is made is that there is also a new pay or quit notice that is to be used for tenants who are rent during the transition time period. So if you plan on serving your tenant a pay rent or quit notice for rent owed during that transition time period, there is now a new notice that SB 91 has created that you must use. The last thing that SB 91 modifies from AB 3088 is it has now pushed small claims court filings back to August 1st of 2021. So they’re continuing to push those dates back as well. So those are some of the main modifications of SB 91. As the next section we’re going to be talking about is the rental assistance program. And the rental assistance program is arguably the most important part of SB 91. So this new program here in California has received $1.5 billion in federal funds that are going to be allocated to landlords and tenants who have been impacted by COVID-19. Now of that 1.5 billion, a small portion, $150 million has been specifically designated to smaller communities with less than 200,000 residents who may have been more impacted by the effects of COVID-19. Now the funds are going to be distributed in three rounds. The first round of fund distribution is going to go to households who have an income that is below 50% of the median area income. So that’s going to be the first round of fund distribution. The second round of fund distribution will be going to communities who have been specifically and negatively impacted more disproportionately than other communities in that area. And we’re still waiting for some additional guidelines on what that exactly will look like, how we will be able to tell which communities were more negatively affected than others. But so far that is the plan for the second round of fund distribution. The last round, the third round of fund distribution will be going to those households whose income is below 80% of the median area income. So that is how the fund distribution is going to work for the rental assistance program. Next, we’re going to be talking about some of the tenant eligibility requirements for SB 91 to receive some of the rental assistance. So the first requirement is that at least one household member must qualify for unemployment benefits or must have suffered significant income loss as a result of COVID-19. Additionally, one household member must also demonstrate a high risk of homelessness. And how someone would do that would be things like past due utility bills or maybe a copy of any eviction notice from your landlord or even inability to demonstrate unsafe living conditions inside of the property. The last eligibility requirement to receive some of these funds as a tenant is that your household income as I mentioned previously needs to be below 80% of the area median income. All right, guys. So next we’re going to be talking about some of the new tenant protections that have been allotted to tenants through SB 91. So the first is for tenants who have returned a declaration to their landlords stating that they’ve been affected by COVID-19, no late fees can be imposed on those tenants for rent that would have been collected from March 1st of 2020 through June 30th of this year. So that’s the first protection that tenants have now. The second is that no new fees can be imposed on tenants for services that a landlord previously provided. So if for example you gave your tenant free internet each month, you cannot charge them a new fee for that. And also you cannot increase a fee for a previously provided service. So if you charge your tenant $20 a month for the internet previously, you can’t charge them now $40 a month. So that’s another protection that tenants have under SB 91. The next protection is that security deposits cannot be used for unpaid rent. So that’s a pretty big change that SB 91 has imposed as well. There are also some additional protections from applicants that SB 91 has created. So if a tenant is applying for a property and they have experienced COVID-19 financial hardship, that cannot be used as a qualifying factor in whether or not you approve that applicant. So that’s another really big change to make a note of when you’re screening prospective applicants for your property. So the last protection for tenants under SB 91 is regarding rental debt protection. So if your tenant has that signed declaration, stating they’ve been affected by COVID-19 and they are below 80% of the area median income, a landlord can no longer assign or sell any of that debt that the tenant owes. They are prohibited from doing that. If there are tenants are above 80% of the area median income, a landlord can still assign or sell that debt to a collections company, but that does not begin until June, excuse me, July 1st of 2021. So those are some of the new rental protections that are allotted to tenants and applicants under SB 91. So there was also the CDC moratorium that you guys probably remember from a few months back. We just wanted to update you guys on how the CDC moratorium ties in with SB 91. So really the only thing to make note of here is that the CDC eviction moratorium, which is the nationwide eviction moratorium has been extended now to March 31st of 2021. So a change to note there. All right, guys. So now you’re probably wondering how does SB 91 actually help landlords? So very different from AB 3088, SB 91 actually has a provision for landlords in it to recover some additional assistance if they have been impacted by COVID-19. So if landlords are willing to forgive 20% of the debt owed to them by their tenants, the state of California will potentially reimburse the landlord up to 80% of that back-ode rent by the tenants. If the landlords are not willing to forgive that 20% of rent owed to them by their tenants, then the maximum that they would be able to recover from the state is 25% of the total collective amount of rent owed from their tenants. So there’s definitely going to be some more assistance made to landlords. We’re going to keep you guys posted as we have more information about that. We’re also going to have a big FAQ section under the video here where you can learn a little bit more about SB 91 and some of the intricacies of this bill. So if you guys have any other questions or concerns, you’re always welcome to email us or drop us a line. We’re here to help you guys anytime. Thanks for watching.