As most landlords already know, SB 91 was extended through September 30, 2021 under a new law, AB 832. AB 832 both extends the deadline for tenants to pay 25% of the unpaid rent to September 30, 2021 and incorporates several significant changes to existing laws, including new notice requirements and eviction procedures to be used through March 31, 2022.
The information below is an overview of the changes and new requirements under AB 832. Overview of AB 832: AB 832 extends the current COVID-19 eviction protections under AB 3088 and SB 91 for 90 days, (including the obligation to pay 25% of the unpaid COVID rent) through September 30, 2021. It expands the existing State Rental Assistance Program to provide landlords with 100% of unpaid rent owed by qualifying tenants which will be paid to landlords for unpaid rent accruing between April 1, 2020 and September 1, 2021.
Not all tenants will qualify. Only tenants with an income at or below 80% of the area median income are eligible for the funds. “Rent” includes any financial obligation owed by the tenant under the rental agreement. Landlords who have already received the 80% from the rental assistance program will automatically receive the 20% increase without having to submit a new application. AB 832 will pay 100% of unpaid rent for qualifying tenants, even where the tenant has already vacated. AB 832 allows landlords to apply to the State Rental Assistance Program on behalf of tenants and requires the rental assistance program to notify both the landlord and tenant when either submits a completed application for rental assistance, as well as once a “final decision” has been rendered regarding rental assistance, including, whether it was approved, denied, and/or any funds that have been issued. See below for more information on “final decision”.
AB 832 also requires state and local rental assistance programs to provide landlords and tenants easy access to on-line websites/portals which will allow both to verify the status of an application. Access is required to be made available on or before September 15, 2021. Depending on where your rental property is located, the application process will be administered through either your city, county, or the state. For additional information on when, where, and how to apply, go to housingiskey.com.
AB 832 includes new provisions known as the “COVID-19 Rental Housing Recovery Act” (CRHRA) (which is different than, and in addition to, the “COVID-19 Tenant Relief Act”, (CTRA)). CRHRA creates new procedures for unlawful detainers to be implemented and used between October 1, 2021, through March 31, 2022. See below for more details. AB 832 QUESTION & ANSWERS Do I have to participate? No. . . but Yes. While landlords are not required to participate, where a landlord refuses to participate, any individual from a “qualified household” may apply for assistance directly and, if approved, receive money directly from the program. The tenant will be required to remit that payment to the landlord within 15 court days, BUT. . . who is to say the tenants will actually pay their landlords and, if they don’t. . . Landlords who choose not to participate will not be able to evict tenants.
Under AB832, landlords are required to verify in the eviction documents that they have applied for funding. See below for more details. What are the new Notice requirements required by AB 832? Beginning July 1, 2021, Landlords are required to send a new notice to all tenants who, as of July 1, 2021, have any outstanding rent obligations that accrued between March 1, 2020, and September 30, 2021. This includes any tenant who owes rent for this time-period, including tenants who: Have not yet received a 15-day notice to pay rent or quit. Have received a 15-Day notice but failed to return the declaration. Have received a 15-Day Notice and DID return the declaration; and/or, Entered into a payment agreement with the landlord and have been making the payments on time, but still owe unpaid rent under the agreement as of July 1, 2021. Brennan Law Firm has those notices and will serve them on your behalf. Notices in languages other than English can be downloaded from the Department of Real Estate’s website.
How does AB 832 extend eviction protections? As mentioned above, the protections originally created under AB 3088 and expanded under SB 91 are extended under AB 832. Landlords are still required to serve tenants a 15-Day Notice to Pay for unpaid rent accruing between March 1, 2020, and September 30, 2021 before filing an eviction. However, AB 832 extends tenant protections through September 30, 2021 for tenants who return the COVID declaration. Instead of June 30, 2021, tenants who return the COVID declaration now have through September 30, 2021 to pay 25% of the amounts demanded in 15 day notices for unpaid rent accruing between September 1, 2020, and September 30, 2021, (the Transition Period). AB 832 also extends AB 3088’s and SB 91’s expansion of “just cause” protections set out under AB 1482 (statewide rent/eviction control) through September 30, 2021. AB 3088 and SB 91 temporarily expanded the “just cause” requirements of AB 1482 (statewide rent/eviction control) to all properties, even those previously exempt from AB 1482 (such as single-family homes and new construction).
This means that tenancies may not be terminated unless: The termination notice is based on one of the permissible “just cause” reasons specified in AB 1482; and, The just cause reason is stated in the termination notice. Just cause terminations for “demolition” or “substantial renovation” remain temporarily prohibited under AB 832, unless necessary to comply with health and safety laws. Also prohibited are evictions against tenants who fail to vacate at the expiration of their fixed term lease. Is non-payment of rent a “just cause” to evict? The short answer is yes. In non-payment of rent cases, the protections of AB 832 are only applicable to tenants who submit a declaration of COVID-19 financial distress to the landlord within the 15-Day Notice period. If a tenant ignores the 15-Day Notice, the landlord may immediately file an eviction (unless prohibited by a local municipality’s moratorium).
In response to an eviction for non-payment, a tenant who failed to return the declaration of COVID-19 financial distress may still file the declaration with the court within the time period provided to file a response (typically, 5 business days). Where the tenant does so, the court will hold a hearing and, if the judge finds that the tenant’s failure to return the declaration was the result of “mistake, inadvertence, surprise, or excusable neglect”, the tenant will still be temporarily protected from eviction. What else should I know about AB 832? It does NOT prohibit increases in rent. However, check your local moratorium to determine whether rent increases are permitted or prohibited by the local municipality. AB 832 continues to prohibit a landlord from charging or attempting to collect late fees from a tenant who has submitted a declaration of COVID-19-related financial distress. AB 832 prohibits a landlord from increasing “fees” or charging new “fees” for services previously provided by the landlord without charge for a tenant who has submitted a declaration of COVID-19- related financial distress.
AB 832 continues to prohibit landlords (and screening companies) from using unpaid COVID-19 rental debt (amounts that came due between March 1, 2020 and September 30, 2021) as a negative factor when evaluating an application, or as the basis for disqualifying an otherwise qualified prospective tenant. This prohibition applies even if the tenant’s failure to pay rent were not caused by financial distress related to COVID-19. AB 832 extends the prohibition against the sale or assignment of all COVID-19 rental debt accruing between March 1, 2020 and September 30, 2021 until October 1, 2021. After October 1, 2021, the prohibition is only partially lifted. The ban on a sale or assignment is lifted only in connection with tenants who do not meet the eligibility criteria of the federal rental assistance program but, remains in place permanently in connection with tenants who meet the eligibility criteria. What is the “COVID Rental Housing Recovery Act” (CRHRA) under AB 832? The CRHRA creates new procedures for evictions filed between October 1, 2021, and March 31, 2022. The new eviction procedures apply to evictions for recovery of unpaid rent accrued due to a COVID-19 hardship experienced between March 1, 2020, and March 31, 2022. The CRHRA does not apply to new tenancies that begin on or after October 1, 2021. Lease renewals, extensions, and “new” leases with at least one tenant who already lawfully occupies the premises are not considered new tenancies. A new lease in which a tenant takes possession of a new unit presumably qualifies as a “new tenancy”. What new eviction procedures are created by CRHRA? Beginning October 1, 2021, landlords are required to serve a tenant who fails to pay rent with a specific 3-Day Notice To Pay Or Quit informing the tenant about how to apply for rental assistance. When filing the eviction, the court will not issue a summons seeking possession of a residential rental unit based on nonpayment of rent unless the landlord files a statement that meets requirements (1) or (2) below.
(1) The landlord must include both of the following with the complaint: A statement verifying, under penalty of perjury, that before filing the complaint, the landlord completed an application for government rental assistance to cover the rental debt demanded in the case, but the application was denied; and A copy of the “final decision” (see below) from the pertinent government rental assistance program denying the rental assistance application. Or;
(2) The landlord files a statement, under penalty of perjury, verifying that all four of the following are true: Before filing the complaint, the landlord submitted a completed application for rental assistance to the pertinent government rental assistance program to cover the rental debt demanded from the defendants in the case. Twenty days have elapsed since the latter of: The date the landlord submitted the rental assistance application; or The date the landlord served the tenant with the three-day notice. The landlord has neither received notice, nor obtained verification from the pertinent government rental assistance program, indicating the tenant has submitted a completed application for rental assistance. The landlord has received no communication from the tenant indicating the tenant has applied for government rental assistance. What constitutes a “final decision“? “Final decision” means either of the following determinations by a government rental assistance program regarding a tenant’s application: The application is approved. The application is denied for any of the following reasons:
The tenant is ineligible for government rental assistance.
The government rental assistance program no longer has sufficient funds to approve the application.
The application for rental assistance remains incomplete 15 court days after the landlord properly completed the landlord’s portion of the application because of failure on the part of the tenant to properly complete the tenant’s portion of the application.
“Final decision” does not include: The rejection of an application because the landlord failed to complete it or, completed it improperly. Notification that an application is temporarily pending further action by the government rental assistance program or the applicant. Or, Notification that the landlord or tenant applied to the wrong government program.
Does the CRHRA provide additional tenant protections? Yes. Even after a successful eviction, but before the sheriff carries out the lock out, the tenant may still ask the court to stop the eviction if the tenant obtains approval of an application for rental assistance. If the tenant obtains proof of a successful rental assistance application, the court will hear the matter within 5-10 days to determine whether the lockout should be temporarily held for the tenant to obtain rental assistance. This process may be repeated as necessary if there is a delay in the tenant’s receipt of the funds. Are there any limits to tenant protections under AB 832? Yes, for now. On and after October 1, 2021, tenants are no longer protected from eviction by paying only 25% of the unpaid rent. As of October 1, 2021, a tenant is required to pay 100% of the monthly rent to be protected from eviction. This could change if AB 832 is extended.
Are local governments allowed to extend or re-instate local moratoria on evictions for non-payment of rent that conflict with CTRA? No. AB 832 extends the provisions of CTRA that limit the ability of local governments to enact or extend moratoria on non-payment of rent cases. Local eviction moratoria that were in effect before August 19, 2020, may remain in effect but may not be extended. However. . . We anticipate local governments will continue to claim the right to expand and/or enact eviction moratoria unrelated to non-payment of rent. For example, LA County continues to take the position that they are only preempted in their ability to limit evictions in non-payment of rent cases and, otherwise, they may extend additional protections as they deem fit.
As an example, LA County limited the ability terminate a tenancy based on violations of the rental agreement including unauthorized individuals and/or animals. Under AB 832, when will the tenant be required to repay the balance of unpaid rent? AB 832 does not specifically address the repayment of debt, other than to address it in connection with local moratoria. AB 832 states that any provision in a local moratorium which allows a tenant a specified period of time to repay the unpaid COVID-19 rent shall be subject to all of the following: If the provision in effect on August 19, 2020, required the repayment period to commence on a specific date on or before May 1, 2022, that date remains in place and enforceable.
If the provision in effect on August 19, 2020, required the repayment period to commence on a specific date after May 1, 2022, or conditioned commencement of the repayment period on the termination of a local state of emergency, the repayment period is deemed to begin on May 1, 2022. The time period in which a tenant must repay the unpaid COVID-19 rent, (e.g., 12 months) may not be extended beyond the time period in effect on August 19, 2020. Nor may a provision permit a tenant to repay the unpaid COVID-19 rent beyond May 31, 2023.
How will AB 832 interact with the extension of the CDC order preventing evictions through July 31, 2021. AB 832 has no effect on the extension of the CDC eviction moratorium. The CDC order may prevent landlords from evicting tenants, even if that tenant did not comply with CTRA and/or an applicable local eviction moratorium. The CDC order is to be interpreted by local judges so, depending on where your property is located and the environment of the particular courthouse in which your case is heard, the CDC order may or may not affect your case.
The CDC order has been shot down multiple times throughout the country as illegal and unenforceable, but that may not make a difference in your local courthouse. In conclusion, AB 832 is yet another move by California legislators to kick the can down the road. It extends prior eviction protections, enacts new notice requirements, and creates new procedures to be complied with by landlords seeking to evict tenants or terminate tenancies. Moreover, AB 832 offers a faint glimmer of hope to landlords with promises of repayment of 100% of the unpaid rent, (provided the tenant qualifies) and a return to 3-day notices (which are really “23-day notices” due to new notice requirements and eviction procedures). The extension of some provisions through March of 2022 may be interpreted as an implied agenda of the legislators’ to push the evaporating COVID emergency (and its associated tenant protections) well into 2022.