Previously, effective July 1, 2021, the state of California passed AB 832, extending the protections of the COVID-19 Tenant Relief Act, “CTRA.” The bill extended the “Transition Period,” which now expires on September 30, 2021, and creates a “Recovery Period” from October 1, 2021 through March 31, 2022. Previous summaries have discussed the requirements and your options for during the Transition Period, refer to those if you have questions. In this summary, we address the post September filing of cases where a tenant did not pay the 25% required, and the process for the Recovery Period.
TRANSITION PERIOD (SEPT. 2020 – SEPT. 2021)
Notice Requirements
The notice forms for Sept. 2020 through Sept. 2021 remain unchanged, and you may access those in this folder (click on link to access folder) or you may copy this link into your browser: https://www.dropbox.com/sh/d9u6b6232nvp744/AAA-rPRhfrsy_HgjAH0pddjra?dl=0
25% of Rent Due by September 30, 2021
For the transition period, Tenants are required to pay 25% of all “missed payments” on or before September 30, 2021. This means that if a tenant missed four payments in the Transition Period (and paid for the remainder of the months), and they do not pay you 25% of each month missed, and you have served them with a 15 day notice to pay or quit, AND you have applied for rental assistance (more on this below), you may file for eviction on October 1.
Process
If you have not served a 15 day notice (or several notices taken together) that lists each month of rent missed in the Transition Period, you should do so now.
Application of Payments. In applying payments, to calculate whether 25% has been paid, you should follow these rules.
1. If the tenant directs/ instructs you how to apply a payment, apply as instructed
2. Apply the payment to the current month first, and work your way backward. If the payment is enough to cover 25% of each transition month to that date, consider the tenant to have complied with the 25% requirement.
3. You have no obligation to apply a payment, or part of it, to a future month. I.e., a tenant who failed to pay Sept. 2020 through Dec. 2020, submits five month’s rent in January 2021. That payment covers 100% of the rent from Sept 2020 – Jan 2021, you do not have to apply to the 25% requirement going forward, and if payments from Feb. 2021 – Sept. 2021 are not made, those are considered missed payments for which 25% is due by Sept. 30, 2021.
4. If rental assistance is “approved” – even though it is not yet paid, you should consider those months as paid for purposes of calculating the 25%. I.e., if a tenant has made no payments for the entire Transition Period, but was approved for rental assistance through June 2021, then their 25% obligation applied to Jul. 2021 – Sept. 2021 only.
Rental Assistance. Prior to filing for eviction on or after October 1, 2021, against a tenant who failed to pay at least 25% of any missed payment, you must apply for rental assistance. You may not file for eviction until 20 days after you have completed your rental assistance application. Once you complete your application, you may only file eviction after one of the following:
1. The Tenant is denied, and you have a final decision letter from the rental assistance agency, confirming the denial
2. The Tenant fails to complete their portion of the application in 20 days, and you have no information from the Tenant, or the rental assistance agency that the tenant has completed the application.
You may not evict if the application is pending because you (the landlord) have not completed it, or because it was submitted to the wrong agency.
Rental assistance applications cover rent through the date of the application, plus three months into the future. If you have not applied for rental assistance for a tenant in July 2021, or later, you should do so right away, especially if you will want to file for eviction based on the tenant’s failure to pay at least 25% of each payment missed. You can apply at: http://housingiskey.com.
RECOVERY PERIOD (OCT. 2021 – MAR. 2022)
Notice Requirements
The notice forms for October 2021 through March 2022 include several changes, and you may access those in this folder (click on link to access folder) or you may copy this link into your browser: https://www.dropbox.com/sh/d9u6b6232nvp744/AAA-rPRhfrsy_HgjAH0pddjra?dl=0
(Forms will be available after we have obtained the local agency list from the state, on or before October 1)
The notice period reverts back to a three day notice to pay or quit, and it includes a required statement from the State of California regarding the availability of rental assistance. The notice urges the tenant to apply if they qualify. (It unfortunately does not indicate the income cut off of 80% of median income). The notice is also required to include the phone number and website for any local city or county rental assistance agency.
Process
Apply for rental assistance. You are required to apply for rental assistance, and may do so by visiting http://housingiskey.com. Your application must be for the period of rent demanded in the notice. Applications relate to rent through the date of the application, plus for three months into the future. Accordingly, if you have not applied for a tenant in July 2021 or later, you should submit a new application.
Once you fully complete your portion of the application, and submit it, the rental assistance agency will invite your tenant to fill out their portion. The tenant will respond in one of three ways: 1) they will ignore it, 2) they will fill out their portion and be denied, or 3) they will fill out their portion and qualify.
Tenant Qualifies. If the tenant qualifies, you will get an approval confirmation and (according to the legislation) are guaranteed to be paid the funds. In this case, you will not file for eviction for the months included in the funding.
Tenant is Denied. If the tenant is denied, and you receive a confirmation in the form of a final decision letter from the rental assistance agency, and you may file for eviction. In this case, you do not have to wait the 20 days after applying serving the notice.
Tenant Does Not Respond. If the tenant does not complete their portion, then after 20 days, you may file for eviction. You may not file if the tenant has told you that they have completed their portion. (In this case, you should get confirmation from the agency and the tenant, and clarify if anything is missing). You also may not file if your portion of the application was incomplete, or filed with the wrong agency.
You should know that after filing the eviction, the tenant may later complete the application and apply to the Court to have the case set aside. If their application is approved, the Court will dismiss the case.
Tenancies that are initially established after October 1, 2021
For tenancies that commence on or after October 1, 2021, there is no requirement to apply for rental assistance. Although you are required to use the same notice to pay or quit, you may file for eviction immediately after the three day period if the rent is not paid in full. In order to fall under this provision, the tenancy must have initially commenced after Oct. 1: a lease renewal, or change in tenants, after Oct. 1 will not qualify – all tenants in occupancy must have moved in after Oct. 1.
NO CAUSE EVICTIONS
The COVID-19 expansion of just cause for eviction requirements to all rental property will expire on September 30, 2021. However, almost all multi-family properties are still subject to just cause requirements under the Tenant Protection Act, or otherwise. If your property is not because it is newer than 15 years old, or because it is a single family home and you have sent the tenant the notice of exemption, you should be wary of evicting a non-paying tenant without cause. The CTRA has made termination of a tenancy solely for a tenant’s reliance on the COVID-19 rent protections unlawful retaliation. If you want to terminate a tenant and you do not have any basis or reason to do so other than that they did not pay rent during COVID-19, the tenant will likely have a defense to that case. The better approach is to rely on the non-payment provisions of the CTRA (rental assistance, 25% by Sept. 30, etc.) to address a non-paying tenant. On the other hand, if you have a valid, non-retaliatory, non-discriminatory reason that you want to remove the tenant, which is included in the notice, those cases may proceed now without the COVID-19 just cause requirement. Please discuss any no-cause or just-cause case with our office prior to proceeding.
Source: Todd Rothbard Law Offices
Please contact Todd Rothbard Law Offices with any questions.
Phone: (408-244-4200)
Email Office@ToddRothbardLaw.com
