What you need to know about the Pandemic Clearance Agreement
The proposed deal contains some eviction protection provisions for tenants, but no tenancy waiver. Proponents of the bill insist that it is a stopgap solution designed to help Californians in need until – they hope – federal aid comes through.
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No rental discount for tenants. No money for landlords to help them make their mortgage payments. And no real time to do anything else.
Governor Gavin Newsom and state lawmakers on Friday unveiled their plan to protect California from an impending tsunami of evictions caused by the economic fallout from the novel coronavirus pandemic. Not everyone will like it.
The “Law to relieve and stabilize tenants, homeowners and small landlords from 2020“, The product of controversial, last-minute negotiations that flirted with the constitutional deadline for the final wording of the legal texts, protects tenants financially affected by the coronavirus pandemic from eviction payments until February 2021. The legislature will vote on the bill on Monday.
“In any case, you will hear from some, not just those representing tenants … who say we could have done more, better,” Newsom said. “But the entirety and the consequences of what we have achieved in reducing the prospects of millions, literally millions of people, who are being displaced, or at least evicted, have been greatly mitigated by these efforts.”
Curved from a recently patched one $ 54 billion budget deficit and sensitive legal issues Beyond the limits of state power to meddle in private contracts, some Democratic lawmakers insisted the bill was intended as a bridge to next year’s California. Another round of increased unemployment benefits – which experts say kept many tenants afloat before it ran out in late July – could also help hard-pressed tenants.
The California Apartment Association, the capitol’s premier lobby group for landlords, has backed the proposal while eagerly awaiting a state handwash with cash.
“To really address this crisis, the federal government must take its steps,” wrote Debra Carlton, CAA’s executive vice president of public affairs, in a blog post. “COVID-affected tenants need financial support from federal agencies so they can pay their rent.”
Tenant advocacy groups were satisfied with certain safeguards offered by the bill, but expressed disappointment that not all tenants would be protected from eviction for an extended period of time. They argue that displaced tenants will inevitably end up in environments where the coronavirus thrives: duplicate homes, homeless shelters, and multi-generation homes.
A current UC Berkeley analysis found that nearly one million tenant households in California have lost their job due to the pandemic and could face eviction.
“For our low-income customers, this bill provides important protection for those unable to pay the rent, and we hope the legislature will act effectively to pass it on Monday,” said Brian Augusta, a legislative attorney for California Rural Legal Assistance Foundation. “But I will note that the eviction issue remains unsolved for many other tenants.”
Here’s what you need to know about what’s – and what’s not – in the proposal.
Tenants still owe all of the rent they previously missed. They can be vacated starting February 1st if they miss more than 25% of their future rent.
The agreement prohibits landlords from using defaulted rent payments that accrued between March and August 31 as a legal basis for eviction from tenants as long as the tenant fills in legal documents that prove the financial distress caused by COVID-19. Tenant rights groups had long called for this provision.
However, tenants will have to pay part of their rent in the future. Tenants financially affected by COVID-19 would be required to pay 25% of their rent between September 1 and January 31, 2021 in order to avoid an eviction from February.
Tenants can raise this 25% at any time between September and January 31, 2021 – a lump sum payment days before February is permitted.
While tenants may miss some payments and still be protected from eviction, they are still legally liable for all of their rental debts. From March 1, 2021, landlords can enforce all rents owed from the start of the pandemic in a minor court.
While many tenant groups are annoyed at the idea that rental debts incurred during the pandemic should be paid in full, landlords cannot comfort themselves with the provision. While they may have a legal right to defaulted rent payments, it can be difficult for landlords to actually recover money, especially if tenants simply do not have the resources.
A earlier suggestion by Senator Toni Atkins, a San Diego Democrat and chairman of the state Senate, would have given tenants time through 2024 to begin paying off their rental debts. Under this proposal, tenants earning less than a certain percentage of the median state income would have reduced their debts.
Tenants can be evacuated from next week due to other rental violations
While evictions due to missed rental payments in connection with the coronavirus can be frozen until February, evictions due to other rental violations can be continued from September 2 in accordance with the contractual conditions published on Friday.
Landlord groups insisted on this provision, arguing that the state court system’s blanket moratorium on all evictions had allowed tenants to break leases in ways that put their property and the comfort of neighboring tenants at risk.
“We applaud the legislature and the governor for advancing legislation with protection for tenants who have really been harmed by COVID, while ensuring that owners get rid of annoying tenants and residents who can afford to pay rent but may choose to play the system instead, “California Apartment Association chief executive officer Tom Bannon said in a statement.
Tenant groups allege that, taking into account Newsom’s shelter’s public health regulations, all evictions, except in cases of public health and safety, should be locked for at least a few more months. They also worry that landlords are using other rental contract violations as an excuse to remove tenants who owe them rent arrears.
“What the governor announced today is an imperfect but necessary solution to a colossal problem,” said David Chiu, a San Francisco Democrat who tabled an earlier evacuation law backed by tenant groups. “The law is definitely not all that is needed to protect all tenants, but it will prevent and delay many evictions. To do nothing would be disastrous. ”
The bill also prohibits local governments from essentially attempting to override the new state law in the event of evictions due to missed rent payments. However, cities and counties could enact new rules to prohibit evictions in cases unrelated to non-payment of rent. San Francisco has banned evictions in cases unrelated to COVID until December 1st.
Some tenant groups call already Newsom will issue another executive order extending a nationwide eviction moratorium until the end of the year.
How will tenants prove that they are financially affected by COVID in order to qualify for eviction protection?
Tenants earning less than 130% of the national median household income (approximately over $ 90,000) have 15 days after an eviction notice is received to sign legal documents stating that they have suffered a loss of income, have higher medical bills, or are otherwise financially affected by COVID-19. They can also assert their financial situation as an admissible defense in court if they fail to fill out the required documents within 15 days.
Higher income tenants must provide evidence of their loss of income in order to qualify for eviction protection.
No money for small landlords, but some protection from foreclosure
Landlord groups initially supported a proposal on a trial basis that would have granted them tax credits in the amount of the rent owed to them. But that plan was ultimately put on hold, partly out of concerns that it would be impractical and expensive for the state.
Landlords will have to wait until March until new federal stimulus spending is approved to begin reclaiming rental payments that have not been made. Some smaller landlords may find it particularly difficult to wait this long to make monthly mortgage payments. Mortgages that are unsupported by the federal government do not qualify for some of the cease and desist programs that Congress and the Trump administration created in response to the pandemic.
The proposal extends the 2013 “California Homeowners Bill of Rights”Went to small, non-corporate landlords with up to 4 units in the course of the foreclosure crisis at the end of 2000. These “rights” include specific guidelines that mortgage servants must follow when notifying and communicating with borrowers, as well as a prohibition on “two-pronged” foreclosures that allow lenders to execute foreclosures while negotiating loan modification transactions.
But the bill doesn’t stop forcing banks, credit unions and other lenders to offer mortgage loans at the request of small landowners. Many lawmakers thought the state stood on an insecure legal ground regulating banking operations, which are typically the territory of the federal government.
The vote is imminent
So that the bill can come into force immediately, two thirds of the legislators in the Senate and in the state parliament must vote for it on Monday. That’s a high bar for any bill, but with support from Newsom, state lawmakers, and key stakeholders like the California Apartment Association, the Democratic leadership is cautiously optimistic.
MP Chiu reiterated that despite his disappointment with certain provisions of the bill, he is hoping for more help from Washington DC
“Let’s make it clear that this is a temporary solution. As we are tracking the impact of the pandemic and recession on tenants, we need to revisit this conversation early next year, ”said Chiu.