July 14, 2024

California Extends Eviction Ban

California homeowners - California Extends Eviction Ban

Gov. Newsom and the Democratic super-majority in Sacramento just passed the new law extending and modifying the ban on evictions for those Californians affected by the COVID-19 pandemic. Now the ban extends until February 1, 2021! I should say at this point, that this article is just my opinion and should not be regarded as legal advice. Anyone affected or believed to be affected by this new law, should consult with their legal and tax advisors before taking any action whatsoever.

I’ve written about this situation before and how it’s my opinion the way this moratorium was set up actually amounts to the taking of personal property from landlords in California without just compensation. Well, I will modify that and say, the California ban on evictions takes personal property from California landlords without any compensation whatsoever!

California Extends Eviction Ban

San Diego Real Estate - California Extends Eviction Ban

 

This is a prime example of a law that would be passed in a socialist or communist country. It seems ludicrous that the governor of California claims to be helping Californians affected by loss of income because of the virus, but in reality he is putting the entire burden of this rental relief on the backs of California landlords. Plus, by continuing the extension of this ban on evictions, the California legislature is actually making the problem much worse. From what seemed to be a month or two of a possible moratorium, has now passed the six month mark, and with this new law, will reach nine months or more. What looked like it would only be a month or two, and thereby, in some cases, at least for residential rentals, a few thousand dollars, with this new law or extension, many affected residential renters will now end up easily owing more than $10,000 in unpaid rent. I ask you how in the world, are these tenants ever going to be able to pay back such huge amounts in past rent?

Sure, anytime this new bill or the prior moratorium was talked about government officials always stressed how the tenants were not relieved of their rental obligation, but still owed this amount. What they didn’t say, was how the landlords would be able to collect the huge past-due amounts. After all, it seems that once the moratorium ends, many tenants with huge past-due rental amounts will just vanish! Sure, they may move within the state, or they may be forced to move out of state. But the burden and expense of trying to track them down and use legal means to try to collect on these past-due rents, would not only be very costly for the landlords, but prove to be an economic endeavor that will leave the majority of landlords holding the bag.

This new bill, or extension of the moratorium, whichever way you like to look at it, throws a bone to landlords by saying that affected tenants starting on September 1, will have to pay at least 25% of their monthly rental amount. But the truth of the matter is, at 25% of the rent likely will not even cover most landlords’ carrying cost.

In one of my prior articles on the subject I said that if the state of California actually wanted to provide assistance to tenants affected by the virus pandemic, they could have easily done this through the existing welfare or section 8 housing program by providing affected tenants with a process to apply to the state for assistance and the state issue these tenants direct payments to their landlords for the full rental amounts that the tenant is unable to make. With a system like this, the tenants would end up owing their nonpaid rent directly to the state of California, and the landlords would receive their full rental amounts directly from the state.

To me, the above actual scenario of the state of California paying the affected landlords would be the fair way to treat the situation rather than stop evictions and put the burden of collection of lawfully owed rent upon the landlords. It seems hard to fathom that the state of California which recently paid $1,000 to each legal immigrant affected by the pandemic, chose not to pay landlords anything because of California’s mandated eviction ban and put the entire burden on landlords.

Some banks and financial institutions have stepped in and provided relief for landlords and homeowners affected by the pandemic here in California. But, not one financial institution that I am aware of, has forgiven unpaid or partially paid mortgage payments., I didn’t see anywhere, that the state of California was offering property tax relief for the same affected landlords. No, what the financial institutions are doing is providing forbearance in payments by adding them back to the principal or extending the payment schedule so that before the mortgage is paid off the landlords will have had to pay any past-due amounts.

Let’s go back to this new law itself. It’s my understanding that it also provides that all unpaid back rent from March 1 through August 31, 2020, will now be converted to consumer debt, which means that it cannot be used as grounds in a later legal eviction action. Starting on March 1, 2021, California landlords will have the option to try to collect their lost rent in Small Claims Court, but will not be allowed to use this amount of back rent to evict any tenants!

In addition, the new law provides for declarations to be presented to the landlords by those who are affected by the pandemic and unable to pay the full contracted for monthly rent. This is now a more complicated situation and puts new requirements on tenants and landlords alike. Therefore, it is imperative that those who are affected, should definitely get proper legal advice on what their obligations and responsibilities are under this new law.

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California Extends Eviction Ban