An Update on the California Eviction Moratorium
Credit: @sigmund
Since the beginning of the pandemic, there have been federal, state, and local eviction moratoriums. They have been ever-changing and overlapping in some circumstances, leading to a lot of confusion—particularly in California. One thing is becoming clear though, the end of all protections is near. Both residential and commercial landlords and tenants have some unpleasant business to attend to, and mediation can help them do it at the lowest cost and greatest benefit!
What’s Going On?
There are only a few cities left with protections—for now. In many parts of the state where tenants did not apply for rental assistance or didn't qualify, landlords are moving forward with evictions, also known as “Unlawful Detainer” lawsuits in California. Likewise, nearly all protections for commercial tenants are gone. Both commercial and residential landlords and tenants have unique positions, and many will be left with some issues to resolve one way or another. Many will not qualify for assistance, some fell between the cracks of relief programs, and some failed to explore those options, etc. This will leave them with the options of sorting it out somehow, doing nothing, or winding up in court. (Potentially two separate courts!)
Is Court a Bad Idea?
Well… not necessarily? The court might be unavoidable for landlords who cannot come to some agreement with their tenant, the tenant refuses to pay or leave, or leaves voluntarily, but with outstanding debt. To remove a tenant who will not leave, the landlord would have to file an unlawful detainer suit after taking appropriate notice steps, some of which have been supplemented due to COVID-19. Because the court needs to determine the rental assistance situation—and there have been a lot of problems with that)—it is taking a long time to evict a tenant. This can get to be expensive, particularly when the landlord needs an attorney, which would be likely in court. In addition, if a landlord needs to collect back rent from a tenant, they are to do so separately in small claims. The usual $10,000 limit in small claims is removed for rent collection cases. However, a judgment alone does not mean one will necessarily collect on it. So, I guess you could say the court isn’t a place landlords or tenants want to be if they can help it. Between the delays, the uncertainty, and the lack of results benefitting either party very much at times, it’s nice to avoid it whenever possible.
What About Commercial Landlords and Tenants?
Commercial landlords and tenants are in a similar situation regarding the process for eviction in many ways, minus most of the rental assistance issues. However, their overall motivations should potentially be different. Many commercial landlords should have a strong interest in holding onto their current tenants, provided their businesses are getting back on their feet at this point. Even where those tenants have some unpaid back rent, working with them is likely a more attractive option considering that there are many commercial vacancies, and a new business looking to lease may drive a hard bargain on rent. Some commercial landlords will refuse to rent below a certain threshold because of the risk the property value goes down. However, I don’t understand what those people are thinking, because they’re certainly going to have to sell if they can’t rent the spaces! And a vacant commercial building will not be as attractive to a buyer.
What Else Is Out There?
I’m out here! Mediators like myself can help these landlords and tenants come up with agreements that they know they can live with. This can include whether the tenant will be staying, or leaving, or under what conditions, and can also address how debt will be handled. One may wonder what the catch is. There isn’t one, other than the fact that it must be voluntary by all parties. One might see how this could be an easy sell for the landlord, but less so when it comes to the tenant. However, for tenants, there are some important things to consider. At some point, relief funding will disappear and not everyone will get it. Those landlords stuck with the debt will be forced to try to get it from tenants at some point if their respective debts are not forgiven in some manner. For the tenant, having a money judgment against them can be problematic for job and housing reasons, etc. Not to mention, mediation can be an opportunity to come up with a plan to deal with rental debt that works for YOU, rather than a money judgment that may be collected from you less on your terms. The cost of mediation will also certainly be a lot less than what the parties would pay to be represented in court. These types of mediations can resolve relatively quickly, allowing both the landlord and tenant to be free of the uncertainty of their prior situation. This preserves everyone’s time, money, and sanity!