CAA sponsors bill to help landlords and address COVID law

California lawmakers on Sept. 10 adjourned for the year without extending the statewide COVID-19 eviction moratorium, all but cementing its expiration on Sept. 30. 

Although the moratorium is slated to end, elements of the COVID-19 Tenant Relief Act, which includes the limited local preemption, will carry on. For example, that law continues to prohibit local governments from creating their own eviction restrictions for nonpayment of rent through March 31, 2022.

The unlawful detainer process also is temporarily changing. Come Oct. 1 through March 31, 2022, rental property owners will be required to demonstrate they have applied for rental assistance prior to commencing an eviction for nonpayment.

In preparation for the Legislature’s return in December/January, the California Apartment Association sponsored legislation to address a number of issues with the COVID-19 Tenant Relief Act. In addition to imposing the state’s pandemic-related eviction moratorium, the act created a framework for distributing federal rental assistance to cover 100% of unpaid rent and utilities for qualified tenants and landlords.

The CAA-sponsored legislation, SB 747 by Sen. Melissa Hurtado, D-Sanger, would provide financial relief to landlords when their tenants claim a COVID-19 related hardship yet earn too much money to qualify for rental assistance. It would also assist rental housing providers with nonpaying tenants who refuse to cooperate in completing a rent relief application.

The Emergency Rental Assistance Program does not provide dollars for tenants who earned more than 80% of the area’s median income. Some of these renters have amassed substantial rental debt, which rental property owners will find difficult to collect. 

“Eighteen months of pandemic-related eviction restrictions are coming to an end, but loopholes in the rental assistance portion of the COVID-19 Tenant Relief Act remain,” said Tom Bannon, chief executive officer of CAA. “Under the moratorium, thousands of property owners were forced to provide month after month of housing without compensation. Now, that same law has left many of these owners unable to get financial assistance. We want to close that gap.”

The moratorium under the COVID-19 Tenant Relief Act allowed tenants to self-certify their pandemic-related financial hardship. Too often, tenants filed hardship declarations to avoid their financial responsibilities, even while continuing to work full time. In these cases, the renters do not qualify for rental assistance and often won’t cooperate with owners in filing applications. Owners stand little chance of collecting any back rent in these cases, despite having provided free housing for a year and a half.

“Unfortunately, the COVID-19 Tenant Relief Act self-certification process allows only tenants to state their cases with no ability for landlords to challenge a self-certification of COVID-19-related financial distress,” the legislation reads in part.

While SB 747 is still being developed with specific language, it makes clear the state Legislature’s intent to address challenges with the COVID-19 Tenant Relief Act and offers some avenues for granting property owners financial relief. Financial relief options include, but are not limited to hardship loans, property tax deferral programs, and an income tax credit to landlords.