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Receive an update on the status of the eviction moratorium in Solano County because of the inability to pay rent due to the COVID-19 pandemic
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Published Notice Required? Yes ____ No _X__
Public Hearing Required? Yes ____ No _X__
DEPARTMENTAL RECOMMENDATION:
It is recommended that the Board receive an update on the status of the eviction moratorium in Solano County because of the inability to pay rent due to the COVID-19 pandemic.
SUMMARY:
On April 28, 2020, the Board adopted Resolution 2020-67 which established a countywide moratorium on the eviction of residential and commercial tenants who are unable to pay rent as a result of the COVID-19 pandemic, unless the eviction is necessary for the health and safety of the tenant or the landlord, and no-fault terminations of residential tenancies. The County’s moratorium is currently in effect until 90 days after the termination of the Proclamation of State of Emergency or until earlier action by this Board to terminate it.
FINANCIAL IMPACT:
The cost associated with preparing the agenda item are nominal and absorbed by the department’s FY 2020/21 Preliminary Budget while the financial impact of the State Emergency is anticipated to be the steepest economic downturn since the Great Depression. The effect of this moratorium does not waive rental payments otherwise due to landlords but rather merely delays a tenant’s obligation to pay rent due to financial hardship related to COVID-19.
DISCUSSION:
Soon after the initial COVID-19 Proclamation of a Local Public Health Emergency on March 3rd, the declaration of a statewide State of Emergency on March 4th and the resulting stay-at-home orders, there was a recognition of the need to ensure that residents had stable housing in which to actually shelter as well as the looming economic and housing crisis that could develop as a result of so many businesses closed and people unable to work. To address this crisis, emergency regulations were put in place at the national, state, and local level to prohibit COVID-19 related evictions and foreclosures.
In particular, Governor Gavin Newsom issued Executive Order N-28-20 authorizing local governments to ban evictions for residential and commercial tenants based on nonpayment of rent resulting from a loss of income related to COVID-19. Local governments may now suspend evictions when both:
• The basis for the eviction is nonpayment of rent or a foreclosure arising out of:
o a substantial decrease in household or business income; or
o substantial out-of-pocket medical expenses.
• The income loss or medical expenses are caused by the COVID-19 pandemic.
The timeframe for these protections were extended by Executive Order N-71-20 through September 30, 2020.
Pursuant to this Executive Order, on April 28,2020, the Board of Supervisors adopted Resolution No. 2020-67 which established a countywide eviction moratorium for both commercial and residential tenants if eviction is based on nonpayment of rent that became due during the local health emergency. This regulation provides:
• Landlords cannot charge late fees or penalties. Any notice demanding late fees must include a statement that a tenant is not required to pay late fees if the late rent is due to the pandemic.
• Landlords cannot refuse to renew a tenancy if the tenant is behind in rent without first allowing tenant an opportunity to propose a reasonable repayment plan.
• Tenants are still responsible for any unpaid rent.
• Residential tenants can terminate a lease with 30 days’ notice if the cause for the termination is related to the pandemic.
• County moratorium remains in effect during the Governor’s declared State of Emergency and for a period of 90 days afterwards.
• Applies to both unincorporated and incorporated areas of the County unless a city has enacted a more restrictive moratorium, in which case, the more restrictive provisions would apply.
• Encourages landlords and tenants to work with local agencies that can provide rental assistance in accordance with Civil Code section 1947.3, which requires landlords to accept rent payments from a third party under certain circumstances.
The County’s moratorium may not prevent a landlord from suing to evict a tenant but instead, provides the tenant with a defense to the eviction proceeding should the reason to evict be solely due to a failure of the tenant to pay rent related to COVID-19.
The majority of the other eviction and/or foreclosure protections that were initially enacted that prevented the filing of evictions with the courts have expired or are in the process of expiring which include the following:
National:
Under the Coronavirus Aid Relief, and Economic Security (CARES) Act, any landlord with a federally backed (Fannie Mae, Freddie Mac or HUD) mortgage or who participates in federally assisted rental housing program was prevented from evicting or collecting fees/penalties from tenants based on non-payment of rent. Such prohibition expired on July 24, 2020 and as of that date, landlords could begin to serve 30-day notices to tenants to vacate properties for failure to pay rent, which would allow for evictions to begin August 24, 2020.
The Federal Housing Finance Agency (FHFA) instituted a similar eviction moratorium which included single family homes financed by Fannie Mae or Freddie Mac. The FHFA moratorium on single family homes expires on 8/31/20.
Statewide:
Governor Newsom
Executive Order N-37-20 banned the enforcement of residential evictions affected by COVID-19 and extended the timeframe under state law (Cal. Civ. Code § 1167) from five days to 60 days for a residential tenant to respond to an eviction complaint for nonpayment of rent if the tenant:
• Paid rent to the landlord before the date of the order.
• Notified the landlord in writing before the rent is due (but no later than seven days after the rent is due) that the tenant needs to delay paying some or all the rent because of the inability to pay the full amount due to reasons related to COVID-19 (examples of reasons set out in the order).
• Retained documents proving the tenant’s inability to pay the full rent due to COVID-19 reasons (documents include, termination notices, payroll checks, medical bills, or letters from employers). The documents must be provided to the landlord no later than the time for payment of back-due rent.
The Order also banned the enforcement of any writ against a residential tenant satisfying the above requirements. This Order expired on May 31, 2020.
Judicial Council
On April 6, 2020, the Judicial Council adopted 11 emergency rules related to COVID-19, two of which stayed evictions and foreclosure proceedings. Emergency rule 1 dealt with unlawful detainer actions, more commonly known as “evictions”, and prohibited the issuance of summons or entering of defaults unless the eviction be as a result of public health and safety issues and delayed all eviction trials for 60 days. Emergency rule 2 addressed judicial foreclosure actions, staying all pending actions other than those involving issues of public health and safety, tolling the statute of limitations on filing such actions, and extending the deadlines for election or exercise of rights relating to such actions. The Judicial Council voted on August 13, 2020 to allow these two rules to sunset as of September 1, 2020.
A summary of the various eviction protections listed above is attached as Attachment A.
Evictions Locally
Staff reached out to Legal Services of Northern California (LSNC) in the preparation of this report who confirmed that the combination of the various eviction protections have been effective in pausing the filing of evictions locally. However, it is anticipated that without further action by the State or the Federal Government, there will be a wave of evictions filed in September. Potential relief could come in the form of one of three bills that are currently pending in the State Legislature, (i.e., AB 1436, SB 1079, and SB 1410) relating to evictions and/or foreclosure protections. Staff is actively monitoring these bills to determine the effect, if any, on the County’s moratorium.
Rental Assistance Protections
Using the CARES Act funding allocation, the County Administrator’s Office is actively working on rental assistance repayment program to assist renters who have been unable to pay their rent due to COVID-19.
ALTERNATIVES:
The Board could choose not to receive this report or could direct staff to bring back options on amending the moratorium.
OTHER AGENCY INVOLVEMENT:
The seven cities were consulted prior to the adoption of the moratorium. The cities of Benicia, Suisun City, Vacaville and Vallejo had adopted their own moratoriums. Vacaville and Vallejo have since allowed their moratorium to expire while Benicia and Suisun City’s will expire on September 30, 2020. Legal Services of Northern California was consulted on the preparation of this update.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION