With the COVID-19 pandemic having affected everyone in California, lawmakers have been working overtime to create more legislation to protect tenants, including their latest proposal, AB 828.

What is AB 828? If passed, this bill would enable tenants to petition the courts to cut their rents by 25%, and they wouldn’t have to show cause for the rent reduction.

Would Hurt The California Rental Market

There’s no denying that many tenants in California need help with paying their rents because of the simple fact that if a tenant isn’t working, or they recently lost their jobs, they may be unable to pay their rents as before.

The good news is that even though California lawmakers have been drafting legislation to address the problem of rent payments in California, landlords and tenants have already been working together to ensure that tenants can pay their rents and stay in their rental properties.

For example, in a Zoom meeting with Brad Seaman and Justin Isaacs, Jayson Yoss, President of GoldenWest Management confirmed that less than 5% of GWM residents, in the 2nd month of quarantine, have been unable to pay their rents and less than 22% of residents have had to go into a payment plan or require a discount on their leases.

This is excellent news considering the “doom and gloom” being reported in the media on an hourly basis of how Coronavirus is affecting the economy and the rental market.

In the Zoom meeting, Jayson Yoss also confirmed that vacancies at GoldenWest Management are currently at 2%-3% as well. He sees the rental market as remaining “robust” despite the challenges posed by Coronavirus.

Why AB 828 Is Bad for Business

Even though some tenant’s rights groups may support AB 828, the reality is that if the state were to ask a restaurant like McDonald’s or a grocery store like Albertsons to cut their prices by 25%, this move would hurt that business financially and ultimately lead to their closures.

Sadly, when it comes to landlords in California, some lawmakers are under the assumption that landlords can “take it on the chin” and absorb a 25% rent reduction without any problem.

The truth about a rent reduction is that it will be especially harmful to landlords who only own one or more rental properties and rely on the income from rent to cover their expenses.

AB 828 also creates a possible due process violation, or constitutional argument, because it’s also possible that if approved, it would impede a tenant’s ability to enter into an executed contract.