Commercial Eviction Moratoriums in California and Other Real Estate Issues Arising From the COVID-19 Pandemic
March 23 2020
As a result of the ongoing COVID-19 pandemic, on March 16, 2020, Governor Newsom issued an executive order authorizing local governments to halt evictions, slow foreclosures, and protect against utility shutoffs. In response, numerous California municipalities have passed emergency orders enacting moratoriums on evictions. These orders vary from entity to entity, with some protecting only residential tenants, and others including commercial tenants. The orders also vary from entity to entity to the extent that some constitute a blanket moratorium, while others require the tenant to demonstrate that inability to pay is related to the pandemic. However, all of the ordinances are clear, the moratoriums result in rent deferral, not rent forgiveness.
As of March 20, 2020, the governmental entities that have passed such moratoriums include, but are not limited to, the following:
- City of Sacramento at least until March 31, 2020. Residential only.
- City of West Sacramento through May 31, 2020.
- City of San Francisco through April 30, 2020.
- City of San Jose through April 17, 2020.
- City of Fresno through April 19, 2020.
- City of Los Angeles through March 31, 2020.
- County of Los Angeles through May 31, 2020.
- City of Santa Monica through April 30, 2020.
- City of Pasadena through a date to be determined.
- City of Glendale through March 31, 2020.
- City of Long Beach through May 31, 2020.
- City of San Diego through April 10, 2020.
The County of Sacramento and the City of Oakland are considering their own moratoriums and are expected to act at some point later this week. Similarly, although most of the municipalities within Orange County have yet to take action, they are actively considering their own moratoriums. Interestingly, the City of Elk Grove considered a moratorium, but voted against it (4 to 1). On a related note, the federal government has suspended foreclosures on mortgages backed by Freddie Mac, Fannie Mae, and the Federal Housing Administration for 60 days.
In addition to these moratoriums, it is important to know that numerous courts throughout the state are not presently processing or adjudicating unlawful detainer (eviction) proceedings. The majority of the courts are presently closed to the public, with all jury and bench trials deferred. As such, even if these moratoriums were not in place, most courts are unavailable to provide relief.
This situation is constantly evolving, with the local governments, the state government, and the federal government continuously analyzing the situation and considering appropriate relief. We will continue to monitor the evolving landscape and will be prepared to provide any necessary legal assistance. It is important to analyze every situation on its own merit before taking action, as each moratorium varies from the others. It is equally important to understand that there may be post-moratorium, contractual ramifications. Accordingly, if you are impacted by these moratoriums, or believe that you have other COVID-19-related real estate issues, contact us.