Understanding SB91 and the COVID-19 Tenant Relief Act

The onset of COVID-19 has been a catalyst for ever-changing guidelines and laws for tenants and landlords alike. 

The most recent update regarding laws related to the COVID-19 pandemic is SB91. SB91, the State Rental Assistance Program and Extension of the Statewide Eviction Moratorium, was signed into law in California by Governor Newsom on January 29, 2021.

The bill extends the COVID-19 tenant relief act, extends the eviction moratorium through June 30, 2021, adds new tenant protections and outlines guidelines for collecting unpaid rental debt as a result of COVID-19, and creates a new rental assistance program.

Here we have outlined some of the most important changes that come along with SB91.

Eviction Moratorium Extension

The eviction moratorium has been in place since nearly the beginning of the pandemic. SB91 has extended the eviction moratorium from January 31, to June 30, 2021.

For non-payment of rent, the new bill will require landlords to give a 15-day notice, rather than the previous 3-day notice. If given the 15-day notice residents may come back with a declaration of COVID-19 related financial distress, at which point they cannot be evicted.

Landlords required to send notice to tenants

Perhaps the most important part of the new bill, is the requirement for landlords to send all tenants a notice regarding the changes in law. This applies to residents who owe one or more rental payments between March 1, 2020, and February 1, 2021.

Any tenant who owes money needs to receive this document by February 28, 2021, and the landlord is not permitted to serve any new notices until the first notice has gone out.  The content of the form can be found through the California Apartment Association.

COVID-19 Rent Debt Assistance

For many landlords, knowing when they will be able to receive overdue rents is top of mind. SB91 has begun to shed light on how this process will take place, and will continue to be outlined in the coming days and weeks.

Landlords have the option to apply for funds with their tenant’s consent. The application period for rental assistance will open by March 15, 2021. If landlords apply for their tenants, up to 80% of the unpaid amount could be granted if the landlord agrees to waive the remaining 20% owed.

If the landlord does not agree to participate, and the tenant applies, they are only eligible for up to 25% of the remaining, unpaid rent for that period. If a landlord sues a resident for the remaining debt, the court will look at whether or not the landlord applied for assistance to receive funds available. To find more information, please visit caanet.org/CTRA.

If a landlord chooses to sue the tenant for the debt owed from March 1, 2020, through February 1, 2020, landlords must show that they put forth an effort to help the tenants access rental assistance programs. This could include documentation which establishes they tried to investigate whether governmental rental assistance is available to the tenants, sought governmental assistance for the resident, or was willing to cooperate with their tenant’s efforts to seek rental assistance.

Do your tenants qualify for rental assistance?

If you have decided to apply for rental assistance with your tenant’s consent, or cooperating with their efforts to apply, you may be wondering which tenants will qualify for assistance.

For a tenant to qualify for assistance, the tenant should:

• Have one or more persons in their household qualify for unemployment benefits;
• Have experienced a reduction in household income;
• Experienced financial hardship due to COVID-19;
• Or be able to demonstrate a risk of experiencing homelessness or housing instability.

Meeting the criteria does not guarantee that the eligible household will receive assistance funds. With many Americans filing for assistance, priority is given to the most affected households first.

Assistance will be distributed in three rounds. In the first round, those who make less than 50% of the area median income will receive assistance. In the second round, communities who have been disproportionately impacted by COVID-19 will receive assistance. The third and final round will focus on the remaining households who have experienced financial hardship due to COVID-19.

Increased Tenant Protections with SB91

Due to SB91, there have been increased tenant protections. If a tenant has submitted a COVID-19 Tenant Relief Act (CTRA) declaration, the landlord is not allowed to charge or attempt to collect late fees. They are also not allowed to begin to charge for services that were provided for free, prior to COVID-19.

Landlords are not allowed to apply security deposits towards unpaid rent or rental debt, unless the tenant is aware and consents to the money being used in such a way. Additionally, unpaid rent due to COVID-19 cannot be used against potential tenants or act as a negative mark in any way.  

COVID-19 Tenant Relief Act and SB91 Summary

Although the new bill can be a lot to take in, here are a few key points and dates that you should remember:

• SB91 went into effect on January 29, 2021.
• SB91 extends the COVID-19 Tenant Relief Act through June 30, 2021.
• This extension includes the eviction moratorium’s extension through June 30, 2021.
• SB91 requires landlords to give a 15-day notice for non-payment of rent, rather than the previous 3-day notice.
• Any tenant owing money must receive notice of the changes brought about by SB91, by February 28, 2021, and no new notices can be given until it has been received.
• Landlords are encouraged to apply for rent debt assistance for their tenants, with the tenant’s consent. They may qualify for up to 80% if the landlord is willing to waive the remaining 20%.
• If the landlord does not agree to participate in applying for rent debt assistance, the tenant may only qualify for 25% of the owed rent.
• Assistance will be given in three rounds, in which the most affected individuals will receive assistance first.
• Landlords are not allowed to begin charging for services that were previously not being charged for.

To learn more about SB91 and COVID-19 laws and regulations, check back for updates.