Property Management Blog

COVID-19 and Evictions

Tuesday, September 15, 2020

Here we are nearly six months into this Pandemic, and things are changing weekly with regards to evictions and foreclosures.

In March, Gov. Newsom enacted emergency orders that put into place a moratorium on evictions and foreclosures. The original order was to expire on May 31st. However, as we know, it was extended several times. The last time it was extended, there was not an expiration date for the orders.

Mid-August, the Judicial Council of California, voted to end two temporary emergency rules on evictions and foreclosures. A vote initially set for June and was delayed giving Gov. Gavin Newsom and the state Legislature time to come up with a policy and solution to deal with the fallout of evictions and foreclosures. Since the Governor didn’t execute a plan, a vote was held to end the emergency rule. The goal was to push the Legislature to come up with a plan, and the goal worked.

On August 31st, the plan was laid out, and it’s a doozy for Landlords and Property Management Companies.

Let’s break it down:

The regulations laid out at the State and Local levels supersede the CDC regulations. Moving forward, we will address only the regulations laid out by Gov. Newsom, and the local manipulates. In this case, Riverside County laid out strict guidelines, and no COVID-19 rent-related evictions will be allowed until February 1st, 2021.

Protected Period

The period from March 1st, 2020, through August 31st, 2020, is known as the “Protected Period.” For this period, Residents are under protection from eviction as long as they meet the guidelines laid out (see below).

Landlords and Management Companies must serve the resident a 15-day notice for the protected period by September 30th, 2020. The notice must contain a specific declaration explaining that they are protected as long as they can prove they had a COVID-19 hardship. Residents are required to return the declaration signed within 15-days. Once they have signed the declaration, the rental debt becomes a Civil Debt. Landlords can start collecting this Debt in March 2021.  (This is not a misprint; we can’t believe it either)

If the resident fails to return the declaration, the Landlord can file an eviction starting as early as October 5th, 2020. However, once at trial, the resident still has the opportunity to present their case and explain why they didn’t respond during the 15-day time frame. Depending on their response, the Judge can rule in their favor.

Transition Period

The period from September 1st, 2020, to January 31st, 2021, is known as the “Transition Period.” Landlords and Property Management Companies can serve a 15-day notice (there are no longer 3-Day Notices) for September’s rent. There is a different disclosure provided to the residents that are specific for this Transition Period. The 15-day notice and disclosure can be served each month that the resident fails to pay rent. The resident is required to respond each month, continuing to prove they have a hardship. During this Transition Period, residents can pay 25% of the collective rent owed and stave off eviction. The remaining 75% of the rent becomes a Civil Debt effective March 1st, 2021.

Guidelines to Residents:

The original order issued by Gov. Newsom on March 27th, 2020, is applicable only if:

  1. Before March 1st, 2020, the tenant paid rent to the Landlord pursuant to the lease agreement.
  2. The tenant notified the Landlord in writing before the rent is due, or within a reasonable period afterward not to exceed seven days that the tenant needs to delay all or some payment of the rent because of an inability to pay the full amount due to reasons related to COVID-19, including but not limited to the following:
    • The tenant was unavailable to work because the tenant was sick with a suspected or confirmed case of COVID-19 or caring for a household member who was sick with a suspected or confirmed case of COVID-19;
    • The tenant experienced a layoff, loss of hours, or other income reduction resulting from COVID-19, the state of emergency or related government response; or
    • The tenant needed to miss work to care for a child whose school was closed in response to COVID-19.
  3. The tenant must retain verifiable documentation, such as termination notices, payroll checks, pay stubs, bank statements, medical bills, or signed letters or statements from an employer or supervisor, explaining the tenant’s changed financial circumstances to support the tenant’s assertion of an inability to pay. The tenant is not required to submit the documentation to the Landlord in advance of the due date, but will only be required to provide the Landlord with documentation of his/her inability to pay no later than the time of payment of back rent owed.

Tenants are not protected under Gov. Newsom’s order if they do not abide by the above requirements. 

What about other notices and late fees?

Part of the original order states a landlord is NOT able to collect late fees or give the notice to vacate for non-payment of rent. So, while giving a resident notice to vacate since they are living in your home for free seems like a logical option, sadly, they can stay per the orders.

What is Management One doing?

We are contacting non-paying residents weekly to inquire about the rent payments that are owed. We drive by the properties weekly to verify occupancy. We will “tag” the property to see if someone is going in and out of the property if we are unable to confirm occupancy. We are checking with our Attorney weekly to see if there are any changes, and we are checking the County websites to see if there are any changes, like the courts reopening, etc. We are posting the 15-day notices, proper declarations, and when we can file evictions, we will do so immediately. Most importantly, we are staying in contact with the landlords that have residents that are not paying their rent.

Ending on a positive note

Banks continue to give you the Landlord a forbearance on your mortgage, so make sure if you need help on this, call us. Also, it looks like maybe we’re on the downside of this virus and closer to a vaccine.  

All staff is putting in extra time trying to collect on your behalf, 96% of our residents have paid their rent in full, the other 4% have paid some or none. For those in the 4%, we will stay in the trenches with you until all are resolved, that you can count on.

As always, thank you for your commitment to Management One. We will get through this and come out stronger on the other side.

Investment Property