COVID-19 and Lease Termination

Many tenants believe that due to the pandemic, they can terminate their fixed term lease without consequences. This clearly is not the case. Under the Tenant Relief Act, AB 3088, if a tenant has an inability to pay the rent due to the pandemic, the rent will be deferred. It is not forgiven! If you have a tenant who vacates during a lease term, you must account for the security deposit within 21 days. You should indicate on the security deposit itemization that rent is owed through the end of the lease period. Obviously, no portion of the security deposit will need to be returned.

 

Evictions Can Proceed During the Pandemic

Many landlords believe that due to COVID-19, courts are closed and that evictions cannot proceed. This is not the case. While some eviction actions cannot proceed, many other cases can be initiated. Below is a list of cases that can be brought without any delay.

 

  • Any breach of a lease agreement, other than non-payment of rent. Examples: unauthorized persons or pets, alterations to the premises, changing of the locks
  • Expiration of a fixed term lease. If a lease expires on its own terms, an unlawful detainer can be commenced on the failure of the tenant to vacate at the end of the lease term.
  • Nuisance Activity
  • Rent is owed prior to March 1, 2020. If your tenant owes rent that became due prior to March 1, 2020, that action can be immediately commenced. A 3 Day Notice to Pay Rent or Quit would be served for all rent owed through February 29, 2020. If rent is not paid within the 3 day period, an action can be filed. Rent owed prior to March 1st is not considered to be related to the pandemic.
  • If rent is owed from March 1, 2020 through January 31, 2021, an action can be filed under these conditions. A 15 Day Notice to Pay Rent or Quit must be served on your tenant. Your tenant will have 15 days to either pay the rent or return the Declaration, which was required to be served with your Notice. If the tenant does not comply, an action can be initiated after the 15 day notice expires.

 

Good Cause Needed to Terminate a Month-to-Month Tenancy

Under the Tenant Relief Act (AB 3088), good cause is required to terminate a tenancy, even if your property is not subject to rent control. An example would be a single family residence. If your property is tenant occupied, you would not be able to issue a Notice to Quit, even though the tenant is on a month-to-month tenancy. You would need to have good cause to terminate. If you have a house which you are intending to sell, you would not be able to issue a Notice to Quit. This would not qualify as good cause under the Tenant Relief Act. If you or a close family member intends to occupy the residence, that would be considered good cause under this statute. In addition, if your house is in escrow, and the buyer intends to occupy, this also would establish good cause. The statute is set to expire as of February 1, 2021.

 

Rent Increases are Permitted During the Pandemic

The Tenant Relief Act does not prohibit rent increases. Landlords, subject to any local rent control, are free to raise rent to market level. If your property is subject to Statewide Rent Control (AB 1482), you would be able to institute a rent increase in the sum of 5% plus the CPI as established in the month of April of each year. The Tenant Relief Act (AB 3088) has clarified rent increases under AB 1482. The CPI is now calculated based on the local area for where the premises are located.

 

How to Apply Rental Payments

Under the Tenant Relief Act (AB 3088) two time periods are established. The Protected Time Period is from March 1, 2020 through August 31, 2020. The Transition Time Period is from September 1, 2020 through January 31, 2021. If a tenant owes rent in both time periods, an issue can be raised as to how to apply a rental payment. For example if a tenant pays one month’s rent, the landlord is required to apply it to the time period as designated by the tenant. If the tenant does not indicate the time period for which the rent is being paid, then the landlord should apply it to the oldest rent that is owed. That would therefore be applied to the Protected Time Period. A letter should be sent to the tenant acknowledging the payment and designating to which month the payment will be applied.

 

Landlords Forced to Shoulder the Financial Responsibility of the Pandemic

The Tenant Relief Act forces landlords to be solely responsible for the financial burdens of their tenants.  It should be noted that tenants, as well as everyone on this planet, have been impacted by the pandemic. While many tenants are truly in need of assistance, I have personally witnessed hundreds of cases where tenants have abused the system in order to avoid paying their rent. For those tenants who have lost their income, they still would have received unemployment benefits and Federal relief funds. Did any of these tenants then come forward and pay their rent? Even for those tenants who truly do not have funds to pay their landlord, why are our elected officials putting the financial burdens of the pandemic on the shoulders of income property owners? Why is this responsibility placed on our industry? Landlords have their own families to support. If the government believes that tenants need assistance, then the relief should come from the public coffers and not from the pockets of landlords. While our media is claiming that there will not be a tidal wave of evictions, the truth is that there will be a tidal wave of foreclosures.

 

Dennis Block, of Dennis P. Block & Associates can be reached for information on landlord/tenant law or evictions at any of the following offices:  Los Angeles: 323.938.2868, Encino: 818.986.3147, Inglewood: 310.673.2996, Long Beach:  310.434.5000, Ventura: 805.653.7264, Pasadena: 626.798.1014, Orange: 714.634.8232, San Diego: 619.481.5423 or by visiting www.evict123.com. Now, you can also read Dennis Block on Twitter, www.twitter.com/dennisblock or text him at (818) 570-1557.  “Landlord Tenant Radio Weekly Podcasts can be heard at any time at www.EVICT123.com or download the app “EVICT123”.