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SPECIAL ALERT – California Adopts Eviction Moratorium Due to Coronavirus (COVID-19)

As part of the statewide shelter in place order (otherwise called the “lockdown order”), California Governor Gavin Newsom has issued two executive orders relating to evictions for people and businesses affected by the Coronavirus (COVID-19) pandemic. The first executive order, issued on March 16, 2020, authorized municipalities to halt evictions for both residential and commercial tenants. The second executive order, issued on March 27, 2020, banned the enforcement of any eviction orders for residential or commercial tenants affected by COVID-19 through May 31, 2020. However, in order to use these executive orders as a defense, a tenant must:

  1. Retain documentation evidencing the effect that the statewide lock-down orders have caused an interruption in business so as to warrant relief; and
  2. Requires that the tenant notify the landlord, in writing, no more than seven (7) days after the rent becomes due, that the tenant cannot pay all or part of the rent due to the statewide lockdown order.

As a result of the lockdown order, California courts have placed a hold on nearly all evictions in the state, and has effectively suspended evictions for a period of 90 days after California’s COVID-19 state of emergency ends. As of the date of this Business Brief Special Alert, the State of California has yet to provide a definitive date for that to happen.

It is important, however, to understand that the rules relating to the nonpayment of rent relating to the lockdown order may vary depending on where your business is located. In some municipalities, the rules differ from those stated in the Governor’s executive orders. As such, it is important to be familiar with your municipality’s rules relating to your rental obligations during the statewide lockdown.

In addition, the fact that you may be able to avoid paying rent during the lockdown does not absolve your business of the obligation to pay the rent in perpetuity: The Governor’s order allows for you to defer the rent payment, not avoid it altogether.

The attorneys at Vogt, Resnick & Sherak, LLP can help you determine how to negotiate the legal issues presented by the current business lockdown. Call us if you have any questions or concerns relating to this Special Alert or if you have any questions relating to your business needs.