By Tony Schoenberg and Richard Young
CALIFORNIA ’ S APPROACH TO EVICTION MORATORIUMS
The Golden State offers a case study in what to know about renters ’ and lenders ’ rights as the economy reopens .
The COVID-19 pandemic has resulted in a variety of eviction moratoriums enacted by local , state , and federal governments in the United States . The California state moratorium was recently extended and modified , giving residential landlords the ability to opt out of a newly created rental assistance program . In addition , commercial eviction moratoriums enacted by many cities and counties remain in effect or have recently expired , including in San Francisco , Oakland , Alameda County , Contra Costa County , and Santa Clara County .
Residential eviction moratoriums have garnered significant attention since first appearing in March 2020 . Federal eviction moratoriums , such as the Centers for Disease Control ’ s order , have also raised questions about the constitutionality of such protections and whether statutory authority exists to issue such sweeping protections . Neither federal eviction moratoriums nor California ’ s statewide moratoriums have extended protection from evictions beyond residential tenants .
While the state and federal moratoriums apply to residential tenancies , California
Governor Gavin Newsom signed Executive Order N-28-20 in March 2020 , authorizing individual cities and counties to halt evictions of commercial renters impacted by COVID-19 as well . Newsom has twice extended this order , first on June 30 , 2020 , and again on March 4 , 2021 . The latest extension permitted cities and counties throughout California to halt evictions of commercial tenants through June 30 .
Bay Area municipalities have responded to Newsom ’ s executive order by enacting eviction moratoriums that apply to commercial tenancies , many of which are still in effect . However , local eviction moratoriums vary greatly in scope and time of expiration . Therefore , it ’ s essential for commercial landlords and tenants to familiarize themselves with any commercial eviction moratorium enacted in your city and county .
In San Francisco , the commercial eviction moratorium suspended the right of an owner to evict a covered commercial tenant who misses a rent payment during the moratorium period . The ordinance defined covered commercial tenants as any person or entity ( including a subtenant ) with the right to exclusive possession of commercial space provided that person or entity is registered to do business in San Francisco and has combined worldwide gross receipts for 2019 equal to or below $ 25 million . However , it did not cover tenants ( other than 501 ( c ) ( 3 ) nonprofit entities ) that occupy space in property that is zoned or approved for office use . Finally , the ordinance only applied to evictions of covered tenants for nonpayment where the missed rent payment is both :
1 . Due between March 16 , 2020 , and June 30 , 2021 .
2 . Because of financial impacts resulting from COVID-19 .
When a tenant qualified under the San Francisco moratorium , the landlord must give the tenant written notice and an opportunity to repay any missed rent during a forbearance period after the moratorium expires before attempting to recover possession of the premises . The forbearance period varied depending on the number of full-time equivalent employees ( FTE ) the tenant has . In other words , the earliest possible eviction for nonpayment of rent was
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COMMERCIAL INVESTMENT REAL ESTATE MAGAZINE SUMMER 2021