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Moratorium Information

October 1, 2021

To: Law Office Clients

From: Paul Cheng, Esq.

Re: Los Angeles County Moratorium

Dear Valued Client,

Introduction. The Los Angeles County Board of Supervisors (the “Board”) decided to extend many protections under the Los Angeles County Moratorium until January 31, 2022. The decision was 4-0, with Supervisor Barger abstaining. In summary, the following happened that are relevant to you:

(1) At least some of those on the Board are frustrated with the ongoing Los Angeles County Moratorium and seek to end it.
(2) The Board has stated that the State of California has specifically precluded the Board from many residential protections;
(3) The Board has presented language that creates what the Board considers an “affirmative defense” in residential evictions, which will likely be debated by attorneys at trial;
(4) The Board is clearly protecting commercial tenants until January 31, 2022, as long as commercial tenants have complied with certain requirements

Background of Moratorium. Los Angeles County is one of the few counties in California that have a separate county moratorium. This memorandum deals with the decision made on September 28, 2021 but is not inclusive of all issues decided.

Issue Presented by This Whitepaper. What relevant decision was made as to residential and commercial evictions in Los Angeles County.

Important Note. Those in Los Angeles City or with specific moratoriums in their specific city may need to be referenced in conjunction with this Moratorium.

Source Documents and Key Terms.
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB3088 (“AB3088”);
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB91 (“SB91”)

https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB81 (“AB81”)

https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220AB832 (“AB832”)

http://file.lacounty.gov/SDSInter/bos/supdocs/162124.pdf (“Moratorium”)

AB3088, SB91 (January 29, 2021), AB81 (February 23, 2021), and AB832 (June 28, 2021) are collectively referred to as “State Law”.

Question No. 1. What controls, the State Moratorium or the County Moratorium?

Short Answer. Both and when in conflict, lean on the State law.

Analysis. On August 31, 2020, AB3088 was signed by Governor Newsom that provided eviction protections. It was expanded and extended by SB91 (January 29, 2021), AB81 (February 23, 2021), and AB832 (June 28, 2021).

CCP 1179.05(a)(1) per SB91 (restated with identical language in AB832) states the following: “(a) Any ordinance, resolution, regulation, or administrative action adopted by a city, county, or city and county in response to the COVID-19 pandemic to protect tenants from eviction is subject to all of the following: (1) Any extension, expansion, renewal, reenactment, or new adoption of a measure, however delineated, that occurs between August 19, 2020, and March 31, 2022, shall have no effect before April 1, 2022.”

This means that the Board is limited to what it cannot do, which is create new law to protect tenants from evictions.

However, this does not render any action by County as illegal. Just any “Any extension, expansion, renewal, reenactment, or new adoption of a measure…” which I am sure will be subject to much debate at eviction trials as the Los Angeles County Moratorium extension seems to fall into this category.

CCP 1179.05(b) provides a carveout that says: “(b) This section does not alter a city, county, or city and county’s authority to extend, expand, renew, reenact, or newly adopt an ordinance that requires just cause for termination of a residential tenancy or amend existing ordinances that require just cause for termination of a residential tenancy, consistent with subdivision (g) of Section 1946.2, provided that a provision enacted or amended after August 19, 2020, shall not apply to rental payments that came due between March 1, 2020, and March 31, 2022.”

Further, AB3088, SB91 (January 29, 2021), AB81 (February 23, 2021), and AB832 (June 28, 2021) did not touch on commercial tenancies and thus, the Board is able to make decision on commercial evictions, which it has done by extending the protections for commercial tenants until January 31, 2022.

Question No. 2. Can residential evictions proceed as of September 30, 2021?

Short Answer. Yes, for nonpayment of rent. Based on the Moratorium that was passed 4-0 and statements by the Board of Supervisors, residential evictions can proceed after September 30, 2021. However, tenants do have some affirmative defenses, although they are narrow in scope.

Analysis. Page 3/28 of Moratorium. “Most importantly, the County is preempted under the State’s new eviction statue, through March 31, 2022, from enacting new or amending existing protections for residential tenants related to nonpayment of rent due to COVID-19. The County is only allowed to continue protecting its commercial tenants from such evictions for the time being. Therefore, this Moratorium maintains existing protections offered to commercial tenants under the Resolution and a continuation of the residential protections not preempted by the State including protections against nuisance, unauthorized occupants or pets whose presence are necessitated by COVID, denial of entry by landlords, no-fault, and specific instances of owner move-ins.”

Question No. 3. Do residential landlords have to provide a 15-day notice?

Short Answer. No, if based on rent owed for residential tenancies because the expiration of the State Law regarding serving of 15-day notices has passed. This has not been changed by the Los Angeles County Extension moratorium.

It is recommended that you continue to use 15-Day notices for the time being if you are worried or confused.

Analysis. See AB3088 and its progeny which amends the CCP 1179.03(b)(1): “(b) If the notice demands payment of rent that came due during the protected time period, as defined in Section 1179.02, the notice shall comply with all of the following: (1) The time period in which the tenant may pay the amount due or deliver possession of the property shall be no shorter than 15 days, excluding Saturdays, Sundays, and other judicial holidays.” Remember, the State Law has expired.

Question No. 4. Does the Moratorium apply to all counties in California?

Short Answer. No, only applies to Los Angeles County.

Question No. 5. The Los Angeles County Moratorium says that the tenant can provide notice seven days after rent was due but the state law states that must provide notification within fifteen days of Landlord’s 15-day notice. What controls?

Short Answer. Both. But the State Law has expired as to residential protections.

Analysis. The State Law refers to a response from a 15-day Landlord notice for rent, if the Tenant provides notice, pursuant to CCP 1179.03(b)(3): “The notice shall advise the tenant that the tenant cannot be evicted for failure to comply with the notice if the tenant delivers a signed declaration of COVID-19-related financial distress to the landlord on or before the date that the notice to pay rent or quit or notice to perform covenants or quit expires, by any of the methods specified in subdivision (f).”

The Moratorium states that for any Tenant, “A Tenant shall not be evicted for nonpayment of rent, late charges, interest, or any other fees accrued if the Tenant demonstrates an inability to pay rent and/or such related charges due to Financial Impacts Related to COVID-19, the state of emergency regarding COVID-19, or following government-recommended COVID-19 precautions, and the Tenant has provided notice to the Landlord within seven (7) days after the date that rent and/or such related charges were due, unless extenuating circumstances exist, that the Tenant is unable to pay.” (emphasis added)

While this seems to conflict with the State Law expiration, the County Board of Supervisors have explained this as an affirmative defense. As stated by a Supervisor during the meeting: “THEY DO NOT PROHIBIT EVICTIONS, THAT IS IMPORTANT FOR PEOPLE TO UNDERSTAND. THEY PROVIDE RESIDENTIAL AND COMMERCIAL TENANTS WITH A DEFENSE IF YOUR LANDLORD FILES AN EVICTION WITH THE COURTS, AN AFFIRMATIVE DEFENSE. BUT A TENANT HAS TO ANSWER ANY EVICTION NOTICE THAT THEY RECEIVE. IT'S, YOU KNOW, THE STATE, THIS IS ALL THE STATE IS ALLOWING US TO DO.”

What has not expired is that you must pay your Landlord 25% of what is owed by September 30, 2021. And if you do not, you can be evicted.

Question No. 6. What Does the Moratorium Say About Commercial Tenants?

Short Answer. In general, under the Moratorium, if you have less than 100 employees, are not a public company, have multiple locations, or lease space at airports, you cannot be evicted until January 31, 2022 if you provided the proper notice.

Analysis. Commercial tenants excluded from the Moratorium protections are companies with more than 100 employees, or are multi-national, or publicly traded, or lease space at airports. Apart from that, “Commercial Tenants who are unable to pay rent incurred during the Moratorium Period are protected from eviction under this Moratorium, so long as the reason for nonpayment is Financial Impacts Related to COVID-19, and the commercial Tenant provides notice to the Landlord to this effect within the timeframe specified in this Paragraph V.” Page 16/28 of Moratorium.
“Commercial Tenants with nine (9) employees or fewer, may provide, and Landlords must accept, a self-certification of inability to pay rent, and are required to provide notice to the Landlord to this effect within the timeframe specified in this Paragraph V.” Page 14/28 of Moratorium.

“Commercial Tenants with ten (10) or more, but fewer than 100, employees must provide written documentation demonstrating financial hardship, along with notice of inability to pay rent, to the Landlord within the timeframe specified in this Paragraph V.” Page 14/28 of Moratorium.

The timeframe under “Paragraph V” states that notice to the Landlord must be given “within seven (7) days after the date that rent and/or such HOA.103411028.4 10 related charges were due, unless extenuating circumstances exist…” Page 9/28 of Moratorium (Note: “extenuating circumstances” is not defined in the Moratorium).

Question No. 7. It seems that the county moratorium has little impact on residential evictions. Does the Moratorium Have Any Significant Impact on Residential Evictions?

Short Answer. Yes, if you intend to move into the property, but the requirements are very difficult to comply with.

Analysis. The Moratorium provides a complex, multi-element, requirement that does allow you to move back into your property. It requires that the current tenant has been paying their rent and does not have a financial impact from Covid-19, that the Landlord purchased the property before June 30, 2021, that the Landlord must seek to move into an empty unit (if there are 3+ units on the property), must not be company and own at least 50% of the unit, must be a similarly situated person if the Tenant is over 62, disabled, terminal illness, or low income, must provide 60-day written notice, pays for relocation assistance, and disclose such action to the Department of Consumer and Business Affairs. Moratorium Pages 10-19/28.

Conclusion. It is believed that evictions will readily proceed against residential tenants, that they will use the Los Angeles County Moratorium as an affirmative defense, the Courts shall decide whether the Moratorium language for residential tenants control or is in violation of state law, and that, in general, commercial tenants are protected until January 31, 2022.
 

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