Just before California’s eviction moratorium was set to expire at the end of June, Gov. Gavin Newsom signed new legislation which extended the moratorium through the end of September. In addition, the bill also made more of the $5.2 billion in rental relief accessible. Although more access to rental assistance will help ease the pain for renters and landlords alike, we may not be out of the woods just yet. This blog will cover what renters should know and what may lie ahead.

In setting aside $5.2 billion for renters, AB 832 is supposed to cover 100% of back rent owed as far back as April 2020 (as well as up to 3 months of forward rent), for those who qualify. The previous rental assistance program was capped at 80% of the amount owed. Eligibility is determined through adjusted gross income (AGI) and to be eligible, residents must earn 80% or less of the area median income, which varies from county to county. 

For those who do not qualify, however, are still protected by the moratorium. In order to be protected until Sept. 30, tenants must submit a declaration saying they are unable to pay their full rent, but must also pay at least 25% of the back rent due from Sept. 1, 2020 through June 2021—before Sept. 30. After Sept. 30, landlords may begin the eviction process, so long as the tenant does not qualify for rental assistance, in which case they may be allowed another 6 months to apply for rental assistance. 

While it’s a relief to hear that California seems to be trying to get back on track with rental assistance, the question is going to be what happens to the group of people who are not particularly high earners, but who do not qualify for rental assistance? I am concerned that there will still be a sizable portion of people who will be stuck with a debt that puts even more financial strain on them. Many people live practically paycheck to paycheck as it is, and if they fail to qualify for assistance or some other help, they may very well end up in court with rental debt. This is a situation that benefits no one—neither the renter whose credit and future housing situation is affected, nor the landlord, who has bills to pay, but may go through significant expense to collect very little in the end. 

Court is truthfully the last place these parties should be spending their time due to its costliness and how time consuming it can be. Over the last year everyone has had their fair share of struggles due to the pandemic and no one needs more financial burdens as a result of having to attend court. Few people on either side of this type of case are even aware that they can mediate this issue, rather than go through an unlawful detainer trial in court. 

Those who are in significant debt could benefit greatly from trying to work things out on their own—this goes for potential savings for the landlords, too—if they have a good working relationship and can manage. However, these conversations are often difficult to have and the presence of a neutral third party to guide the parties can help tremendously. A mediator will help the parties discuss the situation and each of their options, either together or separately, or some combination of the two. The mediator can also help the parties draft a formal agreement if they wish. There are a number of scenarios that can play out for the parties—some in which the lessee remains on the property and some not. But most importantly, in either event the parties will have discussed possibilities at length and chosen their own resolution. Knowing what to expect next gives everyone the most relief and opportunity to move past their issues much faster than the alternatives.

If you or someone you know is struggling with rental issues and are in danger of being evicted, contact me today! Resolve Mediation offers a free 15 minute meeting to discuss your needs and how mediation can help save you time and money.