Landlords/Tenants Await Tenant Protection Bills Pending in the Legislature
There are two bills pending in the legislature intended to protect renters from evictions. There impact on landlords will be substantial.
- SB 1410 would stop evictions and give tenants until 2034 to repay missed rent by making payments to the state along with their taxes. It also would give landlords tax credits equal to the amount they failed to collect from their tenants. The bill passed the Senate on June 26 and is now before the Assembly Judiciary Committee and a vote is expected soon.
- Under AB 1436 evictions would be banned until three months after the state of emergency ends or April 1, 2021, whichever comes first. Tenants would have an additional 12 months to repay back rent if they experienced COVID-related hardships. That bill passed in the Assembly on May 29 and is scheduled to be heard in Senate Judiciary Committee on August 12.
- The relief provided by SB 1410 excludes commercial tenancies. Specifically, it authorizes landlords and tenants to sign and execute tenant-owner rent stabilization agreements during the state of emergency.
- The tenant-owner rent stabilization agreement allows the tenant to postpone the tenant’s unpaid rent and forbids the owner from serving a notice terminating the tenancy or filing a complaint for unlawful detainer for the unpaid rent during the state of emergency, unless an exception applies. In exchange, the landlord registers with the Franchise Tax Board to become eligible for a credit against their tax liability.
The bill would allow landlords for the taxable years beginning on January 1, 2024 and before January 1, 2034 to exclude from gross income the gross amount of unpaid rent in a signed tenant-owner rent stabilization agreement.
Assembly Bill 1436 would protect tenants suffering financial hardship due to pandemic from eviction through at least April 2021 and will protect landlords by granting a one-year forbearance to small landlords with properties of up to four units. Property owners of buildings with five or more units would also be eligible to request a six-month forbearance if the amended bill is approved.
RINA’s real estate experts keep up a close watch on issues affecting our clients so we can provide them with practical solutions for these uncertain times. Please feel free to reach out us.