The economic impacts of COVID-19 are unprecedented. Property owners, investors and residents alike are facing challenges that no one could have seen coming. Due to the state’s closure and reopening plan, many residents still are unable to work, especially in industries such as restaurants or hospitality. Without receiving a monthly paycheck, and even if any kind of second stimulus package is released, many residents are only able to pay partial rent or are unable to pay their rent at all.
Before COVID-19, if you didn’t pay your rent then you would be sent to collections and evicted, as stated in most lease agreements signed when a resident moves in. But now, can a property owner evict a resident during the COVID-19 pandemic? California Governor Gavin Newsom addressed that issue in the signed legislation described in the press release below.
Governor Newsom Signs Statewide COVID-19 Tenant and Landlord Protection Legislation
Published: Aug 31, 2020
SACRAMENTO — Governor Gavin Newsom today announced that he has signed legislation to protect millions of tenants from eviction and property owners from foreclosure due to the economic impacts of COVID-19. These protections apply to tenants who declare an inability to pay all or part of the rent due to a COVID-related reason.
“COVID-19 has impacted everyone in California – but some bear much more of the burden than others, especially tenants struggling to stitch together the monthly rent, and they deserve protection from eviction,” said Governor Newsom. “This new law protects tenants from eviction for non-payment of rent and helps keep homeowners out of foreclosure as a result of economic hardship caused by this terrible pandemic. California is stepping up to protect those most at-risk because of COVID-related nonpayment, but it’s just a bridge to a more permanent solution once the federal government finally recognizes its role in stabilizing the housing market. We need a real, federal commitment of significant new funding to assist struggling tenants and homeowners in California and across the nation.”
Highlights of this legislation include:
- A resident cannot be evicted before February 1, 2021 as a result of missing rent payments due to a COVID-19 hardship.
- The COVID-19 hardship must have happened between March 4 – August 31, 2020.
- In order to avoid eviction, if a hardship occurs from September 1, 2020 – January 31, 2021, the resident must pay at least 25% of the rent amount due.
- Residents are still responsible for unpaid amounts to the property owner, but a property owner cannot begin to recover the debts owed until March 1, 2021.
This legislation is intended to offer legal and financial protections for residents and also extends anti-foreclosure protections in the Homeowner Bill of Rights to small landlords. To gain a good understanding of your options as a property owner and how to move forward if residents are missing rent payments, it's important to speak to a legal expert before taking action.
If you’d like to take the guesswork and headaches out of managing your investment property Hignell Property Management can help with collecting rent, landlord and tenant laws, accounting and reports, and more. We’re investor-centered and have your best interest in mind. We manage your property the same way we’d manage our own – we care about saving on expenses, increasing the bottom line, getting good renters and positive results.