This article is part I of a two-part series covering California’s Tenant, Homeowner, and Small Landlord Relief Stabilization Act of 2020. This first part reviews the temporary moratorium on tenant eviction.

The Tenant, Homeowner, and Small Landlord Relief Stabilization Act of 2020

The Tenant, Homeowner, and Small Landlord Relief Stabilization Act of 2020 (Tenant Relief Act), also known as AB 3088, is an unprecedented statewide law which imposes a temporary moratorium on eviction of residential tenants for nonpayment of rent that became delinquent between March 1, 2020 and January 31, 2021 due to the tenant’s coronavirus (COVID-19)-related financial distress.

The Tenant Relief Act (TRA) protects a wide range of residential tenants who occupy:

  • apartments;
  • single family residences (SFRs);
  • mobile homes; and
  • accessory dwelling units. [Code of Civil Procedure 1179.02(h)(1)]

The TRA does not provide protection for commercial – non-residential – tenants. [Code of Civil Procedure §1179.02(h)(1)]

COVID-19-related financial distress experienced by a residential tenant necessary to avoid eviction for non-payment of rent includes:

  • loss of income caused by the COVID-19 pandemic;
  • increased out-of-pocket expenses directly related to the health impact of COVID-19;
  • increased expenses directly related to the health impact of the COVID-19 pandemic;
  • childcare responsibilities or responsibilities to care for an elderly, disabled or sick family member directly related to the pandemic; and
  • other circumstances related to the COVID-19 pandemic which have reduced a tenant’s income or increased a tenant’s expenses. [CCP 1179.02]

15-Day Notice to Pay and COVID-19 Declaration

The TRA protects financially disrupted tenants from being evicted when they fail to make rental payments due to COVID-19-related financial distress during an eviction moratorium period running from March 1, 2020 through January 31, 2021. [CCP §116.223]

The eviction moratorium contains two periods of delinquent rent – separated by September 1, 2020 – each with different rent payment obligations to avoid eviction. Importantly, to act on their right to evict under the TRA, the landlord serves separate and different 15-day notices on a tenant to demand payment of rent which became due and is now delinquent for each of these two periods.

The Three-Day Notice to Pay Rent has been temporarily superseded by a 15-day Notice to Pay Rent to evict a tenant for a monetary default on their lease or rental agreement.

Critically, a blank COVID-19 Declaration form is delivered to the tenant with the service of any of 15-day notice to pay. The declaration, entitled a Tenant Declaration of COVID-19-Related Financial Distress, is prepared and returned by a tenant who has experienced a COVID-19-related financial hardship which renders them unable to pay rent as agreed.

Editor’s note – A blank COVID-19 Declaration is included at the end of all RPI 15-day notices in use through January 31, 2021. It is numbered RPI Form 575-4.

The tenant’s declaration alone relieves the tenant from eviction for nonpayment of any amount of rent during the first delinquent rent period, but requires payment of 25% of the agreed rent during the second delinquent rent period.

Landlords need to give at least 15 days’ notice to tenants, excluding weekends or judicial holidays, to return a COVID-19 Declaration, pay rent or be subject to a Three-Day notice to quit and evicted. [See RPI Form 577-1]

Each of the two 15-day Notice to Pay Rent forms only applies to rent due and payable during one of the two delinquent rent periods. The first Notice to Pay Rent is for March 1, 2020 to August 31, 2020 delinquencies, known as the protected time period. The other Notice to Pay Rent is for September 1, 2020 to January 31, 2021 delinquencies, known as the transition time period. On February 1, 2021, the eviction moratorium ends and use of the 15-day notice reverts back to the Three-Day Notice to Pay.

Related Writings:

2020’s Tenant Protection Act Part 1: Just Cause Eviction

2020’s Tenant Protection Act Part 2: Rent Caps

Realty Publications Inc. (RPI) previously published four separate three-day notice forms based on the Tenant Protection Act (TPA)of 2019:

  • Three-day Notice to Quit – for properties subject to cause eviction requirements [See RPI Form 577-1]
  • Three-day Notice to Pay Rent – for properties subject to just cause eviction requirements [See RPI Form 575-3];
  • Three-day Notice to Pay Rent with Related Fees – for properties subject to just cause eviction requirements [See RPI Form 575-4]; and
  • Three-day Notice to Perform – for properties subject to just cause eviction requirements [See RPI Form 576-1]

The 15-day Notice to Pay Rent supersedes these four forms when the default is monetary in nature and occurred during the eviction moratorium – March 1, 2020 through January 31, 2021.

When the tenant breaches a nonmonetary term of the lease or rental agreement during the eviction moratorium, such as for performance issues other than rent, the landlord continues to use a Three-Day Notice to Perform to start the termination of the tenancy. [See RPI Form 576 and 576-1]

Alternatively, a tenant, residential or nonresidential, who intends to vacate and avoid further liability under a month-to-month rental agreement, needs to give 30 days advance notice to the landlord. [See RPI Form 569 and 571]

Eviction avoidance for COVID-19-related financial distress

A tenant who has experienced financial distress from the pandemic and is unable to pay part or all of their rent to their landlord during the first delinquent rental period between March 1, 2020 and August 31, 2020 may by a declaration avoid eviction through January 31, 2021, for failure to pay any delinquent rent for this first period of the moratorium.

The landlord is the first to act by serving the tenant with the 15-day Notice to Pay and the COVID-19 Declaration. The tenant then has 15-days to fill, sign and return the declaration to the landlord in order to avoid eviction. [CCP §1179.03(d); See RPI Form 575 (COVID-19) and 575-1 (COVID-19)]

Thus, a COVID-19 distressed tenant only needs the declaration to avoid eviction through January 31, 2021 for COVID-19-related defaults occurring between March 1, 2020 and August 31, 2020, the protected time period.

The transitional time period has different requirements for landlords and tenants regarding delinquent rent and eviction. When, between September 1, 2020 and January 31, 2021, a tenant becomes delinquent on rent due and payable, the landlord needs to serve the tenant with a separate 15-day Notice to Pay, together with the COVID-19 Declaration.  Tenants who experience continued financial hardship due to COVID-19 during this second transitional time period can avoid eviction for failure to pay rent as agreed when they:

  • sign and return the declaration of COVID-19-related financial distress to the landlord within 15-days; and
  • pay at least 25% of each rental payment as they become due and payable between September 1, 2020 and January 31, 2021. [See RPI Form 575-2 (COVID-19) and 575-3 (COVID-19)]

For example, consider a tenant who provides a declaration form to the landlord regarding decreased income or increased expenses due to COVID-19 which prevented them from making a rental payment in the months of September 2020 through January 2021. The landlord cannot evict the tenant when, on or before January 31, 2021, the tenant makes a payment equal to 25% of each month’s rental payment.

However, a tenant who is unable to pay any part of the rental payments during the second delinquent rent period who timely provided the landlord  the COVID-19 declaration in response to each 15-day notice the landlord sent during that time period, cannot be evicted when, by January 31, 2021, the tenant pays the landlord an amount equal to 25% of all rental payments due from September through January.

Residential tenants who are not classified as high income do not need to provide proof they are financially distressed due to COVID-19-related financial issues.

Also, landlords are required to provide a translated version of the Declaration of COVID-19-related financial distress in the original language their rental contract or agreement was negotiated. [Code of Civil Procedure §1179.03(d)]

The California Department of Real Estate (DRE) has provided these 15-day Notice to Pay Rent translations, along with the COVID-19 Declaration, in the following languages:

  • Chinese;
  • Korean;
  • Spanish;
  • Tagalog; and
  • Vietnamese.

The translated notices can be can be accessed here.

RPI (Realty Publications Inc.) has published four separate English 15-day Notice to Pay Rent forms as called for by the TRA. The form variations cover the two delinquent rent periods and mandatory notices, with an option for recovery of only rent or rent plus rent-related fees.

Form 575 (COVID-19) and Form 575-2 (COVID-19) are used by a property manager or landlord when a tenant is delinquent on amounts due under a rental or lease agreement during one of the delinquent rent periods, to notify the tenant of the amount of the delinquent rents and related fees payable within 15 days, and inform the tenant of the protections provided to them under the COVID-19 Tenant Relief Act of 2020. [See RPI Form 575 (COVID-19) and 575-2 (COVID-19)]

Form 575 (COVID-19) is used when default occurred during the period of March 1st, 2020 through August 31st, 2020. [See RPI Form 575 (COVID-19)]

Form 575-2 (COVID-19) is used when default occurred during the period of September 1st, 2020 through January 31st, 2021. [See RPI Form 575-2 (COVID-19)]

Examples of amounts of money due periodically under a rental or lease agreement, in addition to scheduled rent, include:

  • common area maintenance charges;
  • association charges;
  • pro rata insurance premiums;
  • property taxes and assessments;
  • late payment and bad check charges;
  • expenses incurred by the landlord to cure waste or failure to maintain the property; and
  • other amounts of money property due as compensation or reimbursement of expenses arising out of the occupancy.

Alternatively, Form 575-1 (COVID-19) and Form 575-3 (COVID-19) are used when the landlord may only collect the delinquent rent without rent-related fees.

Some trial judges in UD action declare late charges are not rent for purposes of enforcing residential rental and lease agreements.

Before a landlord or a property manager includes any late charge (or other amounts due besides amounts stated in rental or lease agreements as base rent) in a notice as part of the total amount, a landlord needs to determine whether the judge presiding over UD actions in their jurisdiction will allow the inclusion of late charges and other rent-related fees in the 15-day notice and UD action.

Judges in UD actions on residential rental or lease agreements vary in their approach to late charges:

  • some allow masked late charges built into the scheduled monthly rent and cloaked as a forgiveness of 6% to 10% of the state rent when paid on or before the due date or within a grace period;
  • some allow a late charge of up to 6% of the delinquent rent as a reasonable charge;
  • some disallow fixed-sum late charges as an unenforceable penalty for being delinquent;
  • some disallow late charges as a forfeiture of money (since the amount exceeds the costs of collection); and
  • some just disallow late charges altogether as an exercise of their discretion.

Information on the treatment given by the local UD trial judge can be obtained from an attorney or other landlords who have experience appearing before the judge.

When the judge will not allow the late charge as part of the amount due from the tenant, the landlord needs to leave it out of the 15-day notice. Instead, the landlord’s best practice is to either deduct the late charge they have demanded from the security deposit or pursue collection in a separate action for money.

Form 575-1 (COVID-19) is used when default occurred during the period of March 1st, 2020 through August 31st, 2020. [See RPI Form 575-1 (COVID-19)]

Form 575-3 (COVID-19) is used when default occurred during the period of September 1st, 2020 through January 31st, 2021. [See RPI Form 575-3 (COVID-19)]

Tenants still owe any unpaid rent to the landlord and may be sued for the money in small claims court starting March 1, 2021 for rent which was unpaid between March 1, 2020, and January 31, 2021.

Additionally, on or before September 30, 2020, a landlord is required to provide a mandatory Notice from the State of California concerning the Tenant Relief Act, to tenants who as of September 1, 2020 are delinquent on one or more rental payments that came due during the protected time  period of March 1, 2020 to August 31, 2020. [CCP §1179.04(a)]

A landlord includes the mandatory State notice with service of a 15-day Notice to Pay Rent demanding payment of rent due and delinquent during the period from March 1, 2020 to August 31, 2020, unless the notice was previously given. [CCP §1174.09(c)]

A landlord may not evict a tenant who defaulted during the protected time period from March 1, 2020 to August 31, 2020 after September 30, 2020 when the tenant did not receive the mandatory State notice of the Tenant Relief Act along with the 15-day notice.

Editor’s note – The mandatory State notice is incorporated into both  RPI which are used for defaults occurring during the protected period of time.

Service of the 15-Day Notice to Pay and COVID-19 Declaration

The first attempt at serving an eviction notice and mandatory State notice of new tenant protections is through personal delivery, called personal service. Personal delivery may be made wherever the tenant is located.

Personal service is to be attempted at both the tenant’s residence and place of business, when known. These two attempts to personally serve the notice are a prerequisite to an attempt at substitute service.

Second, the attempt to personally serve the tenant will fail when they are absent from both their residence and place of business (when known).

In this event, a copy of the notice may then be:

  • handed to a person of suitable age and discretion at either the tenant’s residence or place of business; and
  • mailed to the tenant at their residence, called substituted service.

Third, both the tenant’s residence and place of business may be unknown or the tenant cannot be found for personal service at either the residence or business addresses, or a person of suitable age and discretion cannot be found for substituted service at either place.

In this event, the notice may be:

  • posted on the leased premises; and
  • mailed to the tenant at the address of the leased premises, loosely deemed service by “nail and mail.”

Usually, a landlord’s resident manager or property manager is responsible for preparing and servicing a notice as part of their employment to the landlord. The attorney or unlawful detainer (UD) service handling the anticipated eviction often prepares and causes the notice to be served. The individual who serves the notice will complete a form confirming they served the notice and the method of service completed. This form is called a proof of service.

The 15-day time limit for the tenant to sign and return the Declaration of COVID-19-related financial distress starts the day after the 15-day Notice to Pay is serviced on the tenant and ends 15 business days later, excluding weekends and holidays. [CCP §1179.03(b)(1) and (c)(1)]

For example, when a landlord provides the tenant with a 15-day eviction notice and a Declaration of COVID-19-related financial distress form on Monday, September 21st, the tenant has until Monday, October 12th to return the signed form to the landlord.

Tenants may deliver the declaration of COVID-19-related financial distress to the landlord:

  • in person, when the landlord indicates in the notice an address at which the declaration may be delivered in person;
  • by email, when the landlord indicates an e-mail address in the notice to which the declaration may be received;
  • through U.S. mail to the address indicated by the landlord in the notice. When the landlord does not provide an address for delivery in person, then upon the mailing of the declaration by the tenant to the address provided by the landlord, the declaration is deemed received by the landlord on the date posted, in the event the tenant can show proof of mailing to the address provided by the landlord; and
  • through any of the same methods that the tenant can use to deliver the payment pursuant to the notice when delivery of the declaration by that method is possible. [CCP 1179.03(f)]

Tenant failure to comply

When a tenant fails to return the signed declaration within 15 business days, the landlord may begin the eviction process. The three-day Notice to Quit for properties subject to just cause eviction requirements is used when a tenant has been previously notified of a curable breach and failed to correct it — in this case nonpayment of rent –  to notify the tenant of the breach and indicate they are to vacate and deliver possession within three days. [See RPI Form 577-1]

Tenants may have a backstop to this as long as they can prove they failed to return the hardship declaration due to a mistake, inadvertence, surprise or excusable neglect. [CCP §1179.03(h)(1)(B)]

Though a landlord may act to evict a defaulting tenant and regain possession when the tenant has not complied with the Declaration requirement of the Tenant Relief Act, courts will not engage in formal UD actions until October 5th.

Proof of income

Unless classified as a high-income tenant, tenants do not need to supply proof of their COVID-19-related financial losses. Rather, the COVID-19 Declaration is signed under penalty of perjury.

A high-income tenant has an annual household income of 130% of the median income for the county in which the residential rental property is located. [CCP §1179.02.5(a)(1)(A)]

This does not include a tenant with a household income of less than $100,000.[CCP §1179.02.5(a)(1)(C)]

A landlord may require a high-income tenant to provide documentation supporting the tenant’s claim they have suffered financial difficulties due to COVID-19 when the landlord already has proof of the tenant’s income. A landlord who does not have evidence of high-income status of a tenant may not:

  • require a tenant to provide proof of income when the landlords purpose is to determine whether the tenant is a high-income tenant; or
  • seek confidential financial records from a tenant’s employer, bank, or any other source. [CCP 1179.02.5(b)]

Additionally for high-income tenants, the landlord needs to also serve the 15-day Notice to Pay Rent demanding the payment of rent that came due during the period from March 1, 2020 to August 31, 2020 or during the period from September 1, 2020 to January 31 20201. Again, the 15-day notice is served with a blank copy of the COVID-19 Declaration.

To trigger the high-income tenant’s need to supply proof of income, the landlord checks the appropriate box in the 15-day Notice to Pay Rent. [See §5 in all RPI 575 (COVID-19) Forms]

The landlord’s proof of income for a high-income tenant includes:

  • a tax return;
  • a W-2;
  • a written statement from a tenant’s employer that specifies the tenant’s income;
  • pay stubs;
  • documentation showing regular distributions from a trust, annuity, 401K, pension or other financial instrument;
  • documentation of court-ordered payments including, but not limited to, spousal support or child support; and
  • documentation from a government agency showing receipt of public assistance benefits including, but not limited to, social security, unemployment insurance, disability insurance or paid family leave. [CCP 1179.02.5(a)(2), (c)]

Landlords who try to evict a tenant for non-payment and resort to self-help, such as locking the tenant out and shutting off utilities, will face a penalty between $1,000 and $2,500.  [Calif. Civil Code §789.4 and CCP §116.223(c)]

The new law also limits public disclosure of eviction cases involving nonpayment of rent between March 4, 2020 and January 31, 2021. The TRA sunsets February 1, 2021.

Evictions still possible

Just cause under the Tenant Protection Act (TPA) is extended to all tenants until February 1, 2021. This means a landlord may not evict a tenant without just cause or good reason.

After February 1, 2021, just cause under the TPA will revert back to normal exceptions under the law.

Before February 1, 2021, a tenant is guilty of unlawful detainer when one of the following applies:

  • the tenant was guilty of the unlawful detainer before March 1, 2020;
  • the tenant failed to respond to the notice demanding payment of COVID-19 rental or submit the Declaration of COVID-19-related financial hardship;
  • an at-fault just cause eviction occurred; and
  • a no-fault just cause eviction occurred. [CCP 1179.03.5]

An at-fault just cause eviction includes any of the following:

  • a tenant committed or permitted a nuisance or waste to occur on the property;
  • a tenant conducted criminal activity on the premises or common areas, or used the premises for an unlawful purpose;
  • a tenant assigned or sublet the premises in violation of the expired lease;
  • a tenant refused the landlord’s authorized entry into the premises; or
  • failed to deliver possession after providing the landlord notice to terminate the tenancy or surrender possession.

A no-fault just cause eviction occurs under any of the following reasons:

  • the landlord or their spouse, domestic partner, children, grandchildren, parents or grandparents intend to occupy the premises;
  • the property is withdrawn from the rental market;
  • the property is unfit for habitation as determined by a government agency and through no fault of the tenant; or
  • the landlord intends to demolish or substantially renovate the property. [CC 1946.2(b)(2)]

An improvement qualifies as a substantial remodel or renovation when any structural, electrical, plumbing, or mechanical system is replaced or substantially modified, requiring a permit from a government agency. This includes the abatement of hazardous materials like lead-based paint, mold, or asbestos, which cannot be completed with the tenant residing in the unit, requiring the tenant to vacate for 30 days or longer.

Cosmetic improvements like painting or minor repairs that do not require the tenant to vacate to ensure their safety are not considered substantial remodels. [CC §1946.2(b)(2)(D)(ii)]

For performance-based defaults by a tenant, the landlord uses the 3-day Notice to Perform or Quit to evict a tenant. [See RPI Form 576 and 576-1]

Unlawful detainers for evictions which are non-monetary began on September 2, 2020.

Admonitions for tenants

The moratorium on evictions for tenants who are facing COVID-19-related financial distress ends on February 1, 2021. Landlords may then begin evictions of tenants who fail to pay all past delinquent rent.

Tenants need to now determine a course of action as an alternative – a proverbial Plan B – to remaining where they are.  When a tenant does not pay rent and remains in possession of the residential unit, the accrued rent stacks up for collection by a court award money judgment after the moratorium expires  – no eviction first required.

Tenants are best served negotiating with their landlord now. The objective is an agreement on a reasonable rent under COVID-19 pandemic conditions. The framework of this discussion includes a reduction of 20% to 40% or more of rent due through February 1st. Thus, the tenant remains in their residential unit and the landlord receives some amount of payment – better than 25% for the second delinquent rent period through January 31, 2021.

Landlords generally are inflexible, and the more units they own they more inflexible they are.

Fixations most landlords have are a demand for a lease term rather than a flexible month-to-month rental agreement, and resistance or refusal to agree to rents lower than they have been getting in the past.  They will insist upon these conditions in the face of fast increasing vacancies and delinquencies, part of the sticky-price syndrome of property owners.

A backup plan for tenants faced with an intransigent landlord is to shop for rentals offered at COVID-19-compatible rental rates and move to one they know they can afford.