On the eve of the most recent expiration date, California passed a statewide measure designed to help those renters who are experiencing financial hardship due to COVID-19. Assembly Bill 2179 will grant a moratorium extension ending on June 30. Here are some really important updates on that, and why landlords and tenants alike should be considering mediation as a way to address this problem!

The fact that the moratorium needs to be extended is upsetting for many, since it seems to be necessary mostly due to bureaucratic delays, as rent relief has not been received by a large percentage of applicants. Notably, this change will not affect Los Angeles, Fresno or Alameda county ordinances, but will preempt ordinances for other parts of LA county and elsewhere. Additionally, no local governments can enact new protections until at least July 1, and some others could be delayed. This measure was added to appease powerful property ownership interest groups, such as the California Apartment Association. Unfortunately, this was a very late notice, particularly for many in LA county, who anticipated an extension set to take effect the next day, on April 1. It is vitally important to spread awareness, as many may not know this has been passed and how it could affect them. 

For anyone renting property who has rental debt and is not awaiting rental relief to arrive, AB 2179 only gives these individuals about three months to plan for what comes next. The state is prioritizing rental relief funds based on financial need, therefore, those who have significant rental debt may only receive a portion of the total owed in rental relief. It is unfortunate and places both tenants and landlords in stressful and uneasy positions. On one hand, many renters will be left with debts they cannot readily pay back, and on the other hand landlords who will be forced to go further into debt trying to collect any portion of that debt possible, as there have been few protections for landlords regarding mortgages, etc.  

For tenants who are unable to cover the debt before the extension expires, one could face eviction, and a separate court action for the outstanding rental debt. These tenants would be wise to consider whether staying where they live is really worth it. Many people are moving to different locations, whether pooling resources with family and friends, or finding less expensive communities near or far to live in, cutting other costs, etc. This solution may resolve the eviction concern for them, but it will not absolve them of their debts. For tenants who care about their credit and ability to find housing, having an eviction or money judgment against you can create serious problems. In addition, some people have careers in which they really cannot afford to have things like this on their record. It is definitely in the tenant’s best interest to do some creative problem solving so that this issue does not follow them longer than necessary.

For the landlord, the name of the game is cost. Everything is painfully expensive when you are already out of pocket for an uncertain, but steadily increasing amount of money. Some landlords elect to represent themselves as unlawful detainers. Having watched so many of these cases play out in court, I would strongly advise against this. Parties representing themselves often do not fully understand the procedures and deadlines involved, nor how to do things right and avoid any trouble along the way. The average person does not know how to prepare for a trial, exchange evidence, etc. This can cause further delays for the landlord who cannot afford to keep a tenant and must go through this process to gain possession of the property or collect rental debt. While paying an attorney to do so will ensure less hangups and possibly a better outcome, it can cost upwards of $10,000 to $15,000 to go to trial. They may get a slight break on legal costs if there are multiple tenants. Still, many smaller landlords simply cannot afford this. 

Both of these parties are better served trying to self help in any way possible. There are times we just can’t fully rely on the public solution to fix our problems optimally. Mediation creates an environment where the tenant and landlord can discuss individualized solutions and agreements. It takes a lot of the stress and intimidating nature of handling these matters in court out of the equation. Creating these obligations for oneself willingly ensures that they are more likely to be met. After all, any arrangements made have to be workable, otherwise what’s the point?! Additionally, whether or not the parties choose to have an attorney represent them in mediation, the parties can both keep costs significantly lower than in court, by capping the time spent on the matter. For example, unless the issues are more complex such as in a house rental, etc., it is uncommon for me to bill more than three or four hours. 

It is better for all parties to sort this out preemptively, rather than scramble to deal with massive debts at the last minute, or allow the courts to drag things out and make decisions that may not be practical for anyone whenever possible. Professionals like myself are here to help people out of this mess, so that they can move on and move forward, with the least amount of harm!