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Qualified Low-Income Renters to Receive 100% of Past Due Rent From April 1, 2020

Low-income, California renters who have been impacted by COVID-19 financial related hardships will now be protected from eviction until September 30, 2021, under the latest extension signed by Governor Gavin Newsom. The latest bill, Assembly Bill 832, follows on prior bills Senate Bill 91 and Assembly Bill 3088, which both had expiration dates on June 30th and January 31st, respectively. Under Assembly Bill 832, payments for past due COVID-19 rental debts have been increased from 80% to 100% for qualified renters that apply for the relief program and are at household income levels of 80% of Area Median Income or below.

Assembly Bill 832 extends the provisions of previous eviction protection laws, Senate Bill 91 and Assembly Bill 3088, until September 30, 2021. Up to $5.2 billion in rental relief funding is earmarked to be made available to pay landlords of certain qualifying low-income renters up to 100% (up from 80% under Senate Bill 91) of unpaid rent owed due to COVID-19 financial related hardships experienced by ‘qualified’ renters. Unlike Senate Bill 91, Assembly Bill 832 expands the pool of eligible renters, and will pay the rental debts for qualified tenants that may have previously moved out and pay tenant rental debts directly to tenants when their landlords do not also apply for the rental relief (in these cases, tenants would be required to sign under penalty of perjury that they will utilize rental relief funds for the payment of rent).

The following button below provides a summary of AAGLA’s (Apartment Association of Los Angeles) current interpretation and “key” aspects of Assembly Bill 832, including “FAQs”:

SUMMARY

The following is a summary of Assembly Bill 832. This document is not meant to be comprehensive. You should seek advice from a licensed attorney when making decisions about how to proceed with an eviction or attempting to collect rental debt owed, or with respect to any other matter impacting your lease or relationship with your renter(s).

• Extension. Extends “Transitional Time Period” from June 30, 2021, under prior Senate Bill 91 until September 30, 2021. If a tenant / resident pays at least 25% of their rent due for each of the months from April 1, 2020, to September 30, 2021, and signs a Declaration of COVID-19 Financial Hardship (See Form K.2), they will be protected from eviction. The 25% must now be paid on or before September 30, 2021, and there is no obligation to make periodic (monthly) payments – the 25% may merely be paid as a “lump sum” at any time on or before September 30, 2021.

• New Set of Forms. The Apartment Association has updated all previous forms to comply with this latest update, including the new notice form due on or before July 31, 2021, the declaration form and each of the notices, “Fifteen Day Notice to Pay Rent or Quit,” which are being made available in the member-only Legal Forms Library.

• Extension of Just Cause Protections.
Requires all terminations of tenancies be for just cause through September 30, 2021. Extends expiration date of prohibitions on retaliation because of COVID-19 rental debt from July 1, 2021, under prior Senate Bill 91 to now October 1, 2021.

• Small Claims Court. Delayed landlord access to small claims court to pursue collection of COVID-19 rental debt until October 1, 2021 (Previously August 1, 2021, under expired Senate Bill 91 and March 1, 2021, under expired Assembly Bill 3088).

• Rental Assistance. Expands the rental subsidy program. Assistance could be paid directly to property owners, or in the absence of property owner participation in the application process, directly to renters who sign under penalty of perjury that the funds will be used for the payment of rent. However, only renters falling within household income categories up to 80% of the Area Median Income (AMI) where the property is located may qualify for rental assistance.

The revised rental assistance program will pay landlords up to 100% of the rent in arrears (not total rent for the period) between April 2020 and September 2021 with respect to qualified renters. There is no longer an option for renters to apply to receive just 25% of rental debt owned when their landlord does not participate in the application process.

• Tenants Strongly Are Encouraged to Apply for Protection From Eviction. Under Assembly Bill 832, the new “15-Day Notice to Pay Rent or Quit” (See Form K.3 and K.4) notifies renters that in order to be protected from eviction, they must apply for rental relief within 15-days of receipt of the notice (excluding Saturdays, Sundays, and other judicial holidays), and the State of California will within 20-days following receipt of the renter’s application, will let the renter and landlord know if the renter qualifies for relief. If the renter does not qualify for relief, the landlord will then be permitted to proceed with an eviction.

• IMPORTANT – NEW NOTICE REQUIRED: Another New Informational Notice Due by July 31, 2021. Service of a new informational notice to all tenants who, as of July 1, 2021, have an outstanding rent balance for any period between March 1, 2020, and June 30, 2021, is required. (Note: This new form and all other required Assembly Bill 832 forms are available in the Apartment Association of Greater Los Angeles’ forms library. This notice is Form K.1.)

• Increased Rental Assistance. Rental assistance funding will be increased from 80% of past due rent to 100% of past due rent for qualified renters. Housing providers and renters that had previously applied for the 80% will not be required to reapply as the process is to be streamlined so that the additional 20% will be automatically paid.

• Tenants May Apply on Own / No Landlord Assistance Required. In the event housing providers refuse to cooperate in the rental assistance program by filing an application for assistance, renters may apply on their own for 100% of past due rent; however, once approved, renters will be required to agree in writing, under penalty of perjury, that they will utilize the rental assistance funds to pay past due rent. In order to ensure landlords actually receive the rental relief funds, they are encouraged to apply for the relief along with their renters.

• Renters That Moved On to Now Count. Housing providers will be entitled to apply for 100% rental assistance even if their renter has moved-out and so long as rent is owed due to COVID-19 related financial impacts.

• Preemption of Local Moratoriums. Senate Bill 91 will be amended to include a provision to preempt any further extension of local eviction moratoriums through March 31, 2022. Absent seeing the exact language, it is unclear how this might impact the City of Los Angeles’ eviction moratorium which current does not have an expiration date. However, clearly cities with expired eviction moratoriums, such as Santa Monica, will be precluded from making further extensions until March 2022.

• Repayment of Past Due Rent. Prohibits the passage by any local jurisdiction of an ordinance that allows any tenant a period of time that extends beyond May 31, 2023, to repay COVID-19 rental debt.

• Stay of Actions to Recover COVID-19 Rental Debt. Under Assembly Bill 832, and Senate Bill 91 before it, housing providers who are seeking recovery of COVID-19 rental debt must attach to the complaint documentation showing that they tried to investigate the availability or aid a tenant or cooperate with their tenant in seeking governmental rental assistance. Any such lawsuits pending are now stayed until November 1, 2021.

• Security Deposits. Housing providers may not apply a security deposit to satisfy COVID-19 rental debt, unless the tenant has agreed, in writing, to allow application of the deposit. However, a housing provider may apply the security deposit to satisfy COVID-19 rental debt after the tenancy ends (e.g., tenant moves out).

• Application of Payments. Housing providers may not apply a monthly rental payment to any COVID-19 rental debt other than the prospective month’s rent, unless the tenant has agreed, in writing, to allow the payment to be applied in that manner.

• COVID-19 Rental Debt / Credit Checks. COVID-19 rental debt (as defined in Section 1179.02 of the Code of Civil Procedure) may not be considered as a negative factor for the purpose of evaluating a prospective housing applicant or as the basis for refusing to rent or an otherwise qualified prospective tenant. Debt masking protections for tenants are to become permanent so that credit screening companies may not report past due COVID rental debt.

• Assignment of Rental Debt. Housing providers (or any person for that matter) may not sell or assign any unpaid COVID-19 rental debt for the time period between March 1, 2020, and September 30, 2021, of any person who would have qualified to rental assistance funding (e.g., 80% of AMI or less of household income).

• Receipt of Declaration of COVID-19 Financial Related Impacts. Any housing provider that receives a signed Declaration of COVID-19 financial related impacts will be prohibited from: (i) charging late fees on COVID-19 related rental debt, or (ii) increase fees for services. (New Under Assembly Bill 832, if a renter that apply for rental relief on their own do not remit the relief funds received to their housing provider for payment of rent, the housing provider may charge a late fee not to exceed the amount that the landlord may charge a tenant for one late rental payment under the terms of the lease or rental agreement. Failure to pay the late fee may be grounds for an unlawful detainer.)

• Reduction of Services Due to COVID-19. Any housing provider who temporarily reduces or makes unavailable a service or amenity in compliance with federal, state, or local public health orders will not have violated the rental or lease agreement, nor to have provided different terms or conditions of tenancy or reduced services.

 

(NOTE TO ALL READERS: Assembly Bill 832 is more than 300 pages long and many aspects may be subject to interpretation by the courts. Accordingly, while this document presents our current understanding of Assembly Bill 832, it is subject to change and YOU ARE ENCOURAGED TO SEEK LEGAL ADVICE FOR YOUR PARTICULAR SITUATION.)

 

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