SB91 – COVID-19 Tenant Relief Act (CTRA)

On January 29, 2021, Governor Gavin Newsom signed SB91/TENANT RELIEF ACT to extend the eviction moratorium created by the COVID-19 Tenant Relief Act (AB 3088, 2020) for another five months until June 30, 2021, and creates a state government structure to pay up to 80 percent of past due rent to landlords.

(Read the Governor’s press release here)

The provisions of the bill for both California landlords & tenants, are as highlighted below:

LANDLORD PROVISIONS/ASSISTANCE UNDER SB91:

• Extension of AB 3088 until June 30, 2021.
• Extension of local preemption until June 30, 2021.
• 25 percent payment still required from tenants (but lump sum balloon payment is extended to June 30, 2021).
• Up to 80 percent payment from state/federal dollars to cover the unpaid rent between April 2020 to March 31, 2021; (landlord must forgive the remainder of unpaid rent for that period).
• Rental assistance payments are paid directly to the landlord.
• Additional money is offered to local governments if they follow state payment percentages (up to 80 percent) and follow all applicable state rules (creating consistency).
• Federal/state dollars may pay 25 percent of up to three months of future unpaid rent. Additional dollars will be paid for future unpaid rent depending on available funds.
• Requires a monthly report from the state agency administering the program to the Legislature accounting for funds.
• Unlawful detainer cases can continue if tenant does not respond to notices.
• Small claims option and higher caps for small claims actions remain in place.
• A property owner who did not offer some amenities at the property is not considered to have reduced services under local rent control laws if government mandated the service reductions (e.g., closure of the swimming pool, community room, etc.)
• In considering tenants’ eligibility for federal dollars, the state administration will consider a hybrid model that will provide dollars for households that are at or below 80% AMI for the calendar year 2020 and will also consider households with a current monthly income at or below 80% AMI.  This hybrid model will allow more tenant households to qualify.

TENANT PROTECTIONS UNDER SB91:

• 25 percent rent balloon payment deadline moved to June 30 (The State Business, Consumer Services and Housing Agency has announced, however, that the application process for rental assistance payments will open in March).
• Prohibits debt collection through court actions until July (some cases filed before Oct 2020 can continue).
• Landlords who want to collect debt via court action must first apply for or investigate rental assistance payments and cannot collect any amounts in court for which they were offered and refused to accept rental assistance.
• Landlords cannot charge late fees.
• Landlords cannot charge separate fees for items previous included in rent nor can they increase those fees (e.g., parking, utilities).
• Landlords who refuse to accept the up to 80 percent rental assistance payment and forgive the remaining rent owned for those months, will only receive 25 percent of the past due rent.
• Attorney fees in actions to recover rental debt are capped (consistent with most court rules).
• Credit reports of COVID rental debt may not be used as a basis to deny tenants future housing by landlords or screening services.
• Landlords cannot sell or assign COVID rental debt until July 1, 2021, but can sell or assign thereafter if the tenant did not qualify for state rental assistance program. (CAA is also pursuing state budget dollars for tenants who don’t qualify for federal dollars).
• Landlords cannot apply a security deposit to unpaid rent during the tenancy unless agreed to by the tenant.
• Landlord can only apply monthly rent payments to prospective month’s rent unless the tenant agrees otherwise in writing.
• On or before February 28, the landlord must provide the tenant with a statutory notice about the available federal/state dollars and extension of the 25 percent balloon payment deadline.