Sensing that the state of California was sitting on the edge of an ‘eviction cliff’, Governor Gavin Newsom has signed a last-minute bill (AB 832) that will extend California’s eviction moratorium under the Covid-19 Tenant Relief Act until September 30th.
During this time, residents will continue to be protected from eviction so long as they (1) return the required declaration regarding a COVID-19 financial hardship and (2) pay at least 25% of the rent that became due between September 1, 2020 to September 30, 2021 on or before September 30, 2021. Landlords can continue to require high-income tenant households to return a signed declaration along with verification of financial hardship.
The bill also promises to pay 100% of back rent owed to landlords; at $5.2 billion, state officials certainly have a job ahead of them when it comes to distributing those funds. The big question though is will that be enough money to help landlords and tenants, or will AB 832 be the final straw that sends landlords into default?
Landlords Hard Hit During Eviction Moratorium
COVID-19 has been a once-in-a-lifetime crisis that has struck all walks of life but arguably the hardest hit has been ‘mom and pop’ landlords in California.
With many of their tenants benefitting from the eviction moratorium, smaller landlords in California have suffered as they’ve in most cases had to cover multiple mortgages at the same time just to stay afloat financially.
With minimal success at distributing money from the Federal Government, that’s been allocated to paying landlords back rent statewide, many landlords are not optimistic about the State’s ability to efficiently distribute the money from the Governor’s bailout to landlords statewide.
Most landlords’ groups statewide are skeptical about AB 832 and are doubtful that the money will make it into the hands of landlords by September 30th.
"That will hurt landlords because there will be a lag from the time the rent is due until the program money is paid. We have seen this consistently in the previous programs.” – Jonathan Cohen – CEO Universe Holdings
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