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What opportunities for landlord relief under California SB 91?

Passed in January, SB 91 extended California’s eviction moratorium through July 1, and the collection moratorium through Aug. 1. Renters are still responsible for their rent, but landlords cannot evict based on non-payment when that non-payment is due to duly declared COVID-19-related financial distress.

If a landlord brings an eviction action or terminates utility service in violation of SB 91, the landlord could face penalties of between $1,000 and $2,500.

COVID-19 rental debt is defined as any unpaid rent or other financial obligation that came due between March 1, 2020, and June 30, 2021, when the tenant has made a declaration, under penalty of perjury, that the rent is unpaid due to COVID-19-related financial distress.

80% of rent could be covered if you agree to waive the rest

Under the new law, $2.6 billion in federal rental assistance will be provided to help income-qualified tenants cover their COVID-19 rental debt. The program, called the State Rental Assistance Program, began accepting applications this month.

When a landlord opts into the voluntary program, the landlord will be eligible to receive up to 80% of each tenant’s unpaid COVID-19 rental debt, as long as the renters meet certain income and other qualifications. The landlord must agree to waive the remaining 20%.

When the landlord does not opt into the program, the tenant can apply for up to 25% of their unpaid rent to be covered.

Renters will be prioritized based on need, targeting people at the low end of the Area Median Income (AMI) first. However, some renters are making more than 80% of AMI but are still struggling to pay their rents, and those people will not qualify.

There are other provisions in SB 91, as well, such as:

  • Prohibiting the use of COVID-19 rental debt as a negative factor in evaluating potential tenants
  • Prohibiting the selling or assigning unpaid COVID-19 rental debt through June 30, or in some cases, at all
  • Prohibiting landlords from charging late fees for COVID-19-related rental debt
  • Prohibiting landlords from increasing fees for services that had been provided for free
  • Protecting landlords who reduce or eliminate renters’ amenities in order to comply with public health orders

Many small property owners worry that the $2.6 billion offered through SB 91 won’t be nearly enough to cover 80% of all the qualifying rents that have gone unpaid.  They also worry that the paperwork and compliance requirements will be overwhelming.

A recent survey found that 70% of small-property landlords have mortgages and other expenses that must be paid regardless of how much rent they receive. If SB 91 is too difficult or insufficiently funded, many landlords will lose their livelihoods.

You may want to consult with an attorney to discuss your rights and the court’s progress in opening up the unlawful detainer department in the county where the property is located as each county has different rules to follow that can assist landlords during Covid lockdown restrictions.