New legislation provides California renters from being evicted from their residences through the rest of the year due to financial problems caused by COVID-19. The new law provides no protection for commercial real estate tenants and landlords.
A Temporary Fix
California Assembly Bill 3088, known as the Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020 was signed into law by Governor Gavin Newsom as the legislative session ended. The law is aimed at averting apartment evictions and foreclosures as renters fall behind on payments following job losses caused by pandemic-related business closings.
AB 3088 allows renters to remain in their homes without eviction through January 31, 2021, provided they make partial monthly payments amounting to at least 25% of owed back rent. Landlords can proceed with an eviction case on or after February 1, 2021.
Assembly Member David Chiu explained that AB 3088 is a temporary solution meant to provide some level of certainty to renters and time for the state to determine what additional relief may be needed in the future.
Modest Help for Landlords
The new law does not protect landlords against foreclosure or require banks to provide them forbearance. Instead, it extends protections in the Homeowners’ Bill of Rights to small landlords who own residential property up to four units.
It requires mortgage servicers to contact borrowers before pursuing foreclosure proceedings in order to provide potential forbearance options. When a small landlord is denied a forbearance, it requires the mortgage servicer to provide a written explanation of the decision. The anti-foreclosure protections for small landlords are in effect until January 1, 2023.
AB 3088 permits lawful evictions unrelated to unpaid rent to proceed immediately. It also allows evictions for unpaid rent unrelated to the pandemic to proceed beginning October 5, 2020.