COVID-19 Relief For California Landlords and Tenants
SB 91: COVID-19 Relief for California Landlords and Tenants
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 Discontinue use of the previous notices for the transition period, as they are no longer valid as of February 1, 2021.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
Just Cause Eviction Protections
Protection for Applicants
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?
How does SB 91 help landlords?
SB 91 FAQs
The eviction moratorium is set to end on June 30, 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.