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California Commercial Eviction Moratorium Extended

by Scott Donald, Irvine, October 2020

 

Cities and counties across California have the authority to continue banning commercial evictions based on the COVID-19 pandemic. Governor Gavin Newsome issued an executive order allowing the moratorium, which was originally scheduled to expire September 30, to go on through next spring if needed.

 

The City and County of San Francisco opted to extend their moratorium to November 30. They (and other counties/cities) could continue extending this up through at least March 2021.

 

Eviction moratoriums are intended to protect small businesses that can’t pay rent resulting from closures and restrictions during the pandemic. Landlords are expressing concern that the ban on evictions will have a lasting negative impact on the commercial real estate market.

 

BOMA’s Blog

 

The greater Los Angeles chapter of the Building Owners and Managers Association (BOMA) spoke out against the governor’s order.

 

“We cannot understate how concerning this new policy will be for the commercial real estate industry,” the BOMA LA Chapter wrote in a blog post. “Since the start of the COVID-19 pandemic, both property owners and small businesses have been affected by reduced productivity and revenue. While property owners have been cooperative in deferring rent or revising leases, local and state eviction moratoriums have placed significant burdens on building operations.”

 

The group argued that property managers are still required to pay taxes, employees, and other operational expenses even if tenants stop paying rent. This has “contributed to staff cuts, which impacts building security and sanitation.”

 

Business Closings

 

Even with eviction protections in place, thousands of California businesses have been impacted. Recent data from Yelp, shows that 7,500 companies in the greater Los Angeles area continue to remain temporarily closed and another 7,500 have closed for good.

 

In Northern California, almost 3,000 Bay Area businesses were permanently closed in San Francisco and the East Bay. Another 3,300 businesses remain temporarily closed.

 

Statewide, more than 19,000 California businesses have permanently closed, according to Yelp.