The COVID-19 pandemic has impacted business and living as we know it. Federal, state and local governments are taking action, some quicker than others. “Stay at home” and “shelter in place” orders have impacted landlords and tenants alike. Below is a summary of the most recent and notable developments.
March 18, 2020: U.S. Department of Housing and Urban Development (HUD) Secretary Ben Carson authorized the Federal Housing Administration (FHA) to implement a foreclosure and eviction moratorium for single family homeowners with FHA-insured mortgages for 60 days.
March 4, 2020: Governor Gavin Newsome issued “state of emergency” in California which remains in effect through May 31, 2020. Governor Newsome then issued an executive order allowing local governments broad discretion to enact substantive limitations on residential and commercial evictions for a tenant’s failure to pay rent when:
- Nonpayment of rent arises out of a substantial decrease in household or business income or substantial out of pocket medical expenses, and
- The decrease in income was caused by COVID-19 pandemic, or by any local, state or federal government response to COVID-19, and
- The decrease in income is documented.
In response, a number of local jurisdictions in California have adopted their own restrictions, including Los Angeles and San Francisco.
March 16, 2020: Governor Newsome signed Executive Order N-28-20, which found it “necessary” to promote the stability among commercial tenancies to mitigate the economic pressures of the pandemic. It presses lenders to hold off on foreclosures, which could relieve landlords who are unable to pay mortgages as a result of missed rent.
March 27, 2020: Governor Gavin Newsome issued Executive Order N-37-20 to further protect residential tenants from eviction during the pandemic. In summary, the Order provides tenants with an additional 60 days to answer a complaint for unlawful detainer (based upon non-payment of rent) that was served while the Order is in effect. Under normal eviction rules, tenants have 5 days from the date that an unlawful detainer is served to file an answer. To qualify tenants must:
- Have paid rent due to the landlord pursuant to an agreement;
- Have notified the landlord in writing before the rent is due or within 7 days from when it is due, that the tenant needs to delay payment because of inability to pay due to COVID-19 including:
- Tenant could not work because tenant was sick with COVID-19 or was caring for a family or household member who was sick with a suspected or confirmed case of COVID-19;
- Tenant experienced a lay-off, loss of hours, or other income reduction resulting from COVID-19, the state of emergency or related government response; or
- Tenant had to miss work to care for a child whose school was closed in response to COVID-19;
- Have verifiable documentation which shows tenant’s changed financial circumstances (this information can be provided to the landlord at the time of payment of back due rent).
It should be noted that this Order does not forgive the payment of rent.
The Order is in effect until May 31, 2020.
San Francisco Response: The City and County of San Francisco issued a temporary moratorium which prevents small to medium sized businesses from being evicted due to a loss of income related to the pandemic. This order applies to commercial tenants making less than $25 million a year, based on the 2019 tax year.
City of San Diego Response: Mayor Faulconer said that the City of San Diego is working diligently to provide relief to its residents and businesses who are complying with public health mandates and staying home or suspending their operations. The San Diego City Council requested that the City Attorney draft an ordinance to be voted on in the next few weeks, providing relief to communities across San Diego.
It is anticipated that the new ordinance will NOT relieve tenants of the requirement to pay rent or restrict a landlord from recovering rent in the future.
County of San Diego Response: On March 24, 2020, San Diego County placed a moratorium on all evictions of residential and commercial tenants in the unincorporated areas who have seen their income reduced or been otherwise substantially economically harmed by the COVID-19 pandemic. The county resolution will last through May 31, 2020. Affected residents would still be required to pay back the rent owed at a later date if they miss a payment.
The county also placed a freeze on foreclosures and foreclosure-related evictions.
More than 486,000 residents live in the unincorporated areas of San Diego County and could be impacted in varying degrees.
San Diego Superior Court: The court has announced that it will reschedule all unlawful detainer matters except for petitions for writs seeking emergency relief in unlawful detainer matters.
We will continue to update as more information becomes available. Please contact Anna Roppo at email@example.com with any questions.