Written by Apartment Management Magazine on . Posted in Blog, Laws & Regulations, Leases & Legal

SEPTEMBER 3, 2020

Governor Signs Assembly Bill 3088, the “Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020”

Bill Passed by Overwhelming Majority, Bipartisan Vote in Both the Assembly (59-9) and Senate (33-2)

As anticipated, late Monday night, Assembly Bill 3088, the “Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020” was signed into law by Governor Gavin Newsom and takes effect immediately.  The “key” provisions contained in the legislation are described below.

On August 28, 2020, the Governor’s office, and key leadership members of the Assembly and Senate unveiled language for this temporary, stopgap measure to provide tenant and homeowner relief. The Apartment Association of Greater Los Angeles along with its affiliated apartment associations was actively engaged in negotiations on this bill. The bill is an imperfect short-term vehicle but, to a certain extent, recognizes that state legislation needs to financially help both vulnerable renters and the rental housing owners that keep Californians sheltered in place during this pandemic and governments’ responses to it.

As mentioned, this legislation is merely meant to be a temporary “stopgap” to get the Legislature through the end of January and provide it with needed time to develop a more permanent solution.  The legislation covers rent payments from March 1, 2020 through January 31, 2021 only.

Below are “key” points of the main provisions of the bill, Assembly Bill 3088:

Repayment / Unlawful Detainers (Evictions): There are two separate repayment periods under the bill:

  • The protected period is from March 1, 2020 through August 31, 2020. Rent is due for this period.  This period requires a property owner to provide a written form declaration to renters informing them that they have rental payments due but cannot be evicted if they attest that they have a COVID-19 financial hardship.  The also bill requires those who make at or above 130% Area Media Income (AMI) to provide additional proof of hardship. 130% AMI is determined by what has been published by the Department of Housing and Community Development in the Official State Income Limits for 2020, for the county in which the residential rental property is located.
  • The transitional period is from September 1, 2020 until January 31, 2021.  During this period, a renter who has not made rental payments cannot be evicted if they pay 25% of their rent either monthly or in the aggregate by January 31, 2021.
  • Renters are still responsible for repaying unpaid rent, but it cannot be the basis of an eviction until January 31, 2021.
  • The bill provides that, until February 1, 2025, a small claims court has jurisdiction in any action for recovery of COVID-19 rental debt, regardless of the amount demanded and would provide that a claim for recovery of a COVID-19 rental debt is exempt from the prohibition on filing more than 2 small claims actions. Small claims court is an option. A rental housing owner can still file a lawsuit in the civil division of the Superior Court. Rental housing owners desiring to recover unpaid rent should consult with their attorney as to the benefits and risks of proceeding in small claims court.
  • Evictions to protect health and safety will be allowed, and evictions that commenced prior to March 1, 2020 may proceed.
  • In order to evict a renter on or after February 1, property owners must give a 15-day written notice (not including weekends and judicial holidays).

Preemption:  We were successful in obtaining a limited preemption for ordinances, resolutions, regulations, or administrative actions that have been adopted by a city or county in response to the COVID-19 pandemic to protect tenants from eviction based on nonpayment of rent.  Specifically, any extension, expansion, renewal, reenactment, or new adoption of an existing local rent moratoria measure, however delineated, that occurs between August 19, 2020, and January 31, 2021, shall have no effect before February 1, 2021.

Mortgage Relief and Forbearance:  Mortgage forbearance has been included in the bill for small owner-occupied rental property owners only.  This was the Legislature’s solution to protect the small property owners,  However, it only applies to a “property that is owned by an individual who owns no more than three residential real properties, or by one or more individuals who together own no more than three residential real properties, each of which contains no more than four dwelling units.” The forbearance is also limited to first position security instruments such as a deed of trust or similar lien.

Possible Future Rental Assistance: The bill directs the State Consumer Services and Housing Agency to work on a rent assistance program, which we have been advocating for all year.  We have received a commitment from the Governor’s office to work on a rental assistance program in the future, pending federal funding. This commitment has been part of the negotiations of this bill.  Furthermore, we have already been in touch with the Deputy Secretary of the Agency and we will engage in meetings with the Agency next month.

Throughout the process over the past week or so, the Apartment Association of Greater Los Angeles was able to get significant amendments included in the bill that will provide some relief to rental property owners over the short term, however, as is the case with all compromise bills such as this one, we were unable to get all of the things that we had advocated for.

Some of the provisions that we were able to incorporate into the bill included the requirement of documentation for certain renters when they claim they are not to be able to pay their rent, means testing, limited preemption of local eviction moratoria that are modified after the enactment of this bill, and a commitment to develop rental assistance programs in the future.  We will be continuing our work to have the state government enact legislation that does not place the entire financial burden of the COVID-19 pandemic, and state and local governments’ mandates, on rental property owners.

The Apartment Association of Greater Los Angeles will keep YOU apprised on further developments related to Assembly Bill 3088, including possible renter relief funding.  We will also create forms required to comply with the new law.  Please look at our Legal Forms Library for updates.

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JOIN IN THE FIGHT TO PROTECT YOUR PRIVATE PROPERTY RIGHTS!

The Apartment Association of Greater Los Angeles promotes the highest levels of professionalism within the rental housing industry.

We do this by offering a wide array of educational seminars and member events throughout each year, by providing expert operational advice available daily, and by supplying and maintaining virtually every conceivable agreement form and notice rental housing providers require to successfully own and manage rental properties. We also serve as a powerful advocate and lobbyist for rental housing providers at the local, county, state and federal levels of government. Owning and operating rental housing has become a highly regulated industry, and accordingly, owning and managing rental property has become far more challenging and riskier than ever before. Without an Association such as ours, there would be no other voice fighting for the rights of property owners within our city halls, county offices, and at the state and federal capitols. WE ARE THE VOICE THAT EFFECTS CHANGE!

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