Governor Newsom Orders a Statewide Eviction Moratorium

Governor Gavin Newsom has issued an executive order imposing a statewide moratorium on residential and commercial evictions for non-payment of rent. Effective March 27th, and extending through May 31st, the order compliments an earlier order that only allowed localities to prohibit evictions for non-payment. Beverly Hills was among the earliest in the Southland to do so. What does the statewide moratorium say, and how does our local moratorium compare?

Background on the Statewide Moratorium

The rationale for the moratorium is suggested by the Governor’s stay-at-home executive order N–33–20 signed on March 19th:

To protect public health, I as State Public Health Officer and Director of the California Department of Public Health order all individuals living in the State of California to stay home or at their place of residence except as needed to maintain continuity of operations of the federal critical infrastructure sectors…

The earlier executive order that allowed localities to prohibit evictions (signed on March 16th) predated the stay-at-home order by a few days. However it only allowed localities to act by suspending the application of state law related to eviction. It did not mandate a moratorium. A patchwork of local ordinances sprang up over the past week.

The order was intended to “reduce and minimize the risk of infection” and ensure “housing security and stability” in cases where people cannot pay rent. In making that direct association between public health & safety and housing stability, the order anticipated the governor’s forthcoming stay-at-home order issued just a few days later.

Ten days after the the moratorium allowance order came the governor’s mandatory moratorium executive order (N–37–20, signed March 27th). The statewide moratorium underscored the intent of the stay-at-home imperative by again associating public health & safety with housing stability. Now it required forbearance from residential (and commercial) landlords.

Specifically the statewide moratorium identifies as reasons that qualify for forbearance the “substantial losses of income as a result of business closures, the loss of hours or wages, or layoffs related to COVID–19.” The rationale: eviction will “threaten to undermine Californians’ housing security and the stability of California businesses.” The March 27th order noted that the California Superior Court has suspended civil and jury trials (and related hearings) for between two and four months, so practically speaking no eviction was proceeding anyway.

Statewide Moratorium: Key Provisions

The statewide moratorium pursuant to executive order N–33–20 puts the brake on eviction proceedings, nothing more. It does not specify a forbearance period or describe any process by which the tenant is granted forbearance (more on that below). The moratorium includes three key provisions (paraphrasing):

  1. For the tenant served with a notice of unlawful detainer notice the executive order is in effect will have 60 days to respond (up from the law’s 5 days pursuant to Civil Code §1167);
  2. For the tenant who has lost an unlawful detainer action and been served with a writ of possession (an order to vacate) the writ will not be enforced while the executive order remains in effect; and,
  3. The statewide moratorium on eviction remains in effect through May 31st (presumably it could be extended or superseded by another executive order or legislative action).

The order does not contemplate forgiveness of rent or any kind of rent relief. “Nothing in this Order shall prevent a tenant who is able to pay all or some of the rent due from paying that rent in a timely manner or relieve a tenant of liability for unpaid rent,” says the order.

To qualify for deferred rent payments under the statewide moratorium a tenant must (at the least) be able to demonstrate (paraphrasing):

  • There was a rental agreement in place and rent was paid (note: there is NO mention of timely payment of earlier rent);
  • The tenant has notified the landlord, in writing, of an inability to pay full or partial rent before rent is due or within seven days after the rent is due;
  • Non-payment is “related to COVID–19” including circumstances such as taking care, caregiving, or diminished income from a change in employment or child care responsibilities.

Most notably the statewide moratorium affords a tenant the presumption of hardship. It does not prescribe any process by which the tenant would secure forbearance; the tenant must only be able to demonstrate that she 1) meets the qualifying criteria and 2) retains “verifiable documentation” to support the claim. “This documentation may be provided to the landlord no later than the time upon payment of back-due rent” (emphasis added).

Statewide Moratorium: Qualifying Reasons

Looking more closely at the three broadly-constructed reasons that will qualify a tenant for forbearance (quoting from the executive order):

  • (i) 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 or family member who was sick with a suspected or confirmed case of COVID–19;
  • (ii) The tenant experienced a lay-off, loss of hours, or other income reduction resulting from COVID–19, the state of emergency, or related government response; or
  • (iii) The tenant needed to miss work to care for a child whose school was closed in response to COVID–19.

The qualifying criteria are constructed broadly: the tenant is sick with a suspected or confirmed case of COVID–19; or caring for a household or family member who need not be resident in the household); or suffered a diminution of employment or other income; or caring for a child when schools are closed, and that is regardless of earlier childcare arrangements.

If we compare the statewide moratorium order language with the language from the earlier March 16th order we find a lower hurdle for tenants when it comes to forbearance. The earlier order suggested a “substantial decrease in household or business income” would trigger forbearance; the statewide moratorium now omits “substantial” and says simply, “income reduction.”

Also the statewide moratorium puts less burden on tenants. It does not require that a tenant produce pay stubs, income statements, asset statements or any other personal financial information to the landlord (or to the state) for forbearance — only that the documentation “may” be provided to the landlord “no later than the time upon repayment.” Again the statewide moratorium presumes tenant hardship: if a tenant is asking, why make qualifying difficult in a state of emergency?

Observations about the State Moratorium

Forbearance is available for 60 days upon making a reasonable argument. The tenant need make only a prima facie case for hardship. There is no means test. Clearly compliance with the governor’s stay at home order is the goal and housing instability works against that goal.

Forbearance is available for only 60 days under the statewide moratorium. Unless extended, the order allows the tenant only two months of deferred rent. That’s not a long period given the prevailing uncertainty. More problematic for tenants is that it is not rent forgiven because the rent comes due with the expiration of the moratorium.

There is no grace period for repayment of rent arrears. This is the most problematic aspect of the ordinance: upon expiration the landlord can immediately move to collect back rent through an appropriate legal process (such as unlawful detainer or small-claims court). What are the implications for tenants behind on rent when no grace period is specified?

The state moratorium only presses pause on the eviction process. Eviction proceedings are suspended under the order, but no language in the order would bars a landlord from issuing a 3-day notice or filing an unlawful detainer anyway. Upon expiration of the moratorium, a backlogged eviction case can come to a judge and a writ for possession could be signed (and enforced).

There is no freeze on rent increases. The statewide moratorium only defers the payment of rent; it does not relieve any tenant from paying the rent, so tenant advocates had urged the governor to at least freeze rent increases during the state of emergency. But Sacramento generally does not lead on tenant protections and there is no freeze.

No cavalry is coming to the rescue of tenants. The legislature has been on recess (and will be on recess until mid-April) and no emergency session has been called. There is no prospect of legislative initiative to better protect tenants through a rent freeze, rent relief or any other pro-tenant measure.

The state moratorium falls short of most local initiatives. Across the Southland there are 11 localities (including LA County) have enacted a local eviction moratorium for non-payment of rent. Invariably they provide for a forbearance period of 6 months. Notably, 5 of 11 Southland cities that enacted an eviction moratorium also prohibit all no-fault, just-cause evictions (like for landlord use or changing building managers). Two of them prohibit eviction pursuant to the Ellis Act (redevelopment or condo conversion).

Moratoriums Compared: Beverly Hills vs. Statewide

Local eviction moratoriums came earlier, and generally are more favorable to tenants, than is the statewide eviction non-payment moratorium. The current Beverly Hills eviction moratorium (Urgency Ordinance 20-O-2805) provides for a 6-month forbearance period. It also gives the tenant 30 days after the rent is due to notify the landlord of an inability to pay.

The local moratorium also qualifies a tenant for forbearance under the relatively less-restrictive reasons specified in the state moratorium: suffering from COVID–19 or care-giving to a household or family member, diminished income related to COVID–19, related “extraordinary” out-of-pocket medical expenses or child care when schools are closed. In other words, the local moratorium does not place a too-high burden on tenants.

And the local moratorium also prohibits no-fault, just-cause evictions. That covers lawful evictions where the tenant is not at fault but where the law, or our local rent stabilization ordinance, would allow for eviction with the appropriate notice and a relocation payment.

Read more about the current eviction moratorium in our explainer, Beverly Hills Eviction Moratorium: What You Need to Know. Reasons for lawful no-fault eviction are listed on the city’s rent stabilization office website.

Lastly, the local moratorium ordinance contemplates a voluntary forbearance agreement with the landlord but, when that cannot be agreed, then the tenant would take her case to the new rent stabilization commission. The exact process was not yet determined when the urgency ordinance was adopted.

Update: The staff report for the upcoming March 31st city council meeting includes a new, draft urgency ordinance to change some of the local ordinance terms in a way that is not favorable to tenants. The draft ordinance would introduce a new mandate: financial disclosure by any tenant seeking forbearance under the local moratorium. Tenants would have to provide documentation of lost employment or diminished earnings related to COVID–19 directly to the landlord to gain forbearance. We will have a full analysis by Monday morning.

Next Step: Close the Ellis Loophole!

At the upcoming city council meeting on Tuesday, March 31st, Mayor John Mirisch, presiding over his last meeting as mayor, requested that council discuss a temporary moratorium on Ellis evictions too. If adopted it would close the Ellis Act eviction loophole at least for the duration of the local emergency. That means no landlord could lawfully evict a tenant for no fault of her own if only he says he intends to exit the rental business.

(Under Ellis, the landlord need not actually do anything with the emptied property; he must only provide the required notice to tenants plus a relocation payment.)

Read about the Ellis loophole item (and other COVID–19 related measures to be discussed) in the March 31st staff report. The meeting is scheduled for 2:30 p.m. and it is a ‘tele-meeting.’ No members of the public will be admitted.

Submit comments to the City Clerk by 12:00 p.m. on Tuesday or as the item is considered during the meeting. Members of the public can listen to the meeting at (916) 235–1420 or (888) 468–1195 (participant code 105093) and offer comments on the agenda item when it is considered by email at cityclerk@beverlyhills.org.