On March 16, 2020, Governor Gavin Newsom issued Executive Order N-28-20, which authorized cities to suspend evictions of renters in an effort to promote housing and community stability in a highly uncertain time. The order recognized that many Californians are (or soon will be) experiencing unexpected loss of income or an increased financial burden related to the Coronavirus outbreak.
On March 31, 2020, Los Angeles Mayor Eric Garcetti signed into law “Ordinance 186585” pursuant to the Governor’s order allowing cities to take precautions to protect local housing and commercial real estate markets. The aims of the new law are simple, but will surely have a complex impact as emergency pandemic measures stretch beyond a period of weeks into months.
The Ordinance discusses renter protections for a length of time called the “Local Emergency Period,” which began on March 4, 2020, but which has no set end date. Identifying an end date remains at the discretion of Mayor Garcetti and has yet to be announced.
Relief for Residential Tenants
During the Local Emergency Period, landlords are prohibited from evicting residential tenants for non-payment of rent “due to circumstances related to the COVID-19 pandemic.” Such circumstances are limited to:
- Loss of income due to a workplace closure
- Increased childcare expenses due to school closures
- Increased health care costs related to falling ill with COVID-19 or caring for an afflicted member of the household
- “Reasonable expenditures” stemming from the various governmental emergency measures.
This list indicates that many, if not most, Angelenos should be able to take advantage of the current restriction on residential evictions. There is no requirement that a tenant must lose all their income nor is there a requirement that a tenant’s life be completely upended by the pandemic. The requirements can apply to nearly any tenant who is detrimentally impacted and under financial strain due to the pandemic.
However, the Ordinance is not a “free pass” to avoid paying rent for the next few months. Tenants will have up to 12 months following the expiration of the Local Emergency Period to repay past due rent, with no added interest or late fees. So, while many can take advantage of the eviction ban, there is no long-term relief or “rent forgiveness” being offered. This, of course, may change in the ensuing weeks and months if conditions do not improve.
The Ordinance also prohibits “no fault” evictions during the Local Emergency Period. This means that even if your lease is up and you are renting on a month-to-month basis, your landlord cannot give you notice to vacate your home during the Local Emergency Period. This will surely come as relief to those who felt that a “30-day notice” was imminent. Renters can rest assured that they can stay in their home until the crisis subsides.
Relief for Commercial Tenants
Protections for commercial tenants are similar to those afforded to residential tenants with a few additional caveats. Importantly, however, no protections apply to any tenant which is a “multi-national company, a publicly traded company, or a company which employees more than 500 employees.” So, while locally owned restaurants or shops are offered protections, the big chains are simply not. They will have to pay rent during the pandemic and can be evicted for failing to do so.
Also, like their residential counterparts, commercial tenants are not offered “rent forgiveness” during the Local Emergency Period. Commercial tenants will have only three months to repay any rent they miss during the Local Emergency Period. This is a much tighter timeline than the 12-month repayment period offered to residential tenants.
In summary, Ordinance 186585 offers stop-gap solutions to prevent the ouster of tenants from their homes or places of business. It does not offer full-scale protections and rent relief beyond a deferment of rent payments and a restriction on landlords initiating evictions. As it stands, all rent will eventually become due once the Local Emergency Period is over. It is thus advisable to keep paying whatever rent you can and maintain an open dialog with your landlord about your situation. In fact, the Ordinance encourages landlords and tenants to “mutually agree to a plan of repayment of unpaid rent.”
If you are unsure whether local, state, or federal COVID-19 laws and programs apply to you or whether you can seek monetary assistance, please contact Shenon Law Group for a consultation. Our Sherman Oaks based legal team has the expertise and knowledge to guide you and your business through this uncertain and confusing time.