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AB-1436 Tenancy: rental payment default: state of emergency: COVID-19.(2019-2020)

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Date Published: 07/02/2020 09:00 PM
AB1436:v94#DOCUMENT

Amended  IN  Senate  July 02, 2020
Amended  IN  Senate  June 10, 2020
Amended  IN  Assembly  May 16, 2019
Amended  IN  Assembly  April 25, 2019
Amended  IN  Assembly  March 27, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1436


Introduced by Assembly Members Chiu, Bonta, Gonzalez, Santiago, and Wicks
(Coauthors: Assembly Members Kalra, Nazarian, Quirk-Silva, and Luz Rivas)
(Coauthors: Senators Allen, Durazo, Wieckowski, and Wiener)

February 22, 2019


An act to add Sections 1947.01, 1947.02, and 1947.03 to the Civil Code, and to add Section 1161.6 to the Code of Civil Procedure, relating to tenancy.


LEGISLATIVE COUNSEL'S DIGEST


AB 1436, as amended, Chiu. Tenancy: rental payment default: state of emergency: COVID-19.
Existing law regulates specified terms and conditions of tenancies. Existing law authorizes a landlord to demand security at the beginning of a tenancy for residential property and specifies the purposes for which the security may be used, including, among others, compensating the landlord for the tenant’s default in payment of rent.
This bill would prohibit a landlord from applying a security deposit or monthly rental payment for the satisfaction of an obligation other than the prospective month’s rent if the obligation accrued during or within 90 days after the termination of a state of emergency related to COVID-19, except as specified. between the date a state of emergency relating to the COVID-19 pandemic was declared and either April 1, 2021, or 90 days after termination of the state of emergency, whichever is earlier (hereafter “effective time period”), unless the payment or security is specifically designated by the tenant for the obligation. The bill would provide that a tenant covered tenant, as defined, who failed to pay rent that accrued during that effective time period shall not be deemed to be in default and would prohibit any action for recovery of unpaid rent until 15 months after the state of emergency is terminated. 12 months after the effective time period. The bill would define “covered tenant” as a tenant who is unable to satisfy rent accrued during the effective time period due to a loss of income or increased expenses resulting from COVID-19 and who provides a written statement to that effect to their landlord, as specified. The bill would prohibit certain entities, including a housing provider, from using an alleged default in rent that accrued during that the effective time period as a negative factor for the purpose of evaluating creditworthiness or for other specified purposes.
Existing law provides that a tenant is guilty of unlawful detainer if the tenant continues to possess the property without permission of the landlord after the tenant defaults on rent, among other reasons.
This bill would provide that a covered tenant is not guilty of unlawful detainer if the alleged default in payment of rent accrued during, or within 90 days after the termination of, a state of emergency related to COVID-19. during the effective time period. The bill would require a landlord, in an action to recover a debt arising from an alleged default in rent accrued during that the effective time period to submit in the verified complaint or other document submitted under penalty of perjury the amount of any payments, mortgage forbearance, mortgage forgiveness, or property tax reduction obtained from the lender or local, state, or federal entities to offset, replace, or compensate the creditor for lost rental income, and would require a court to offset the amount of rental payments as specified. The bill would require the landlord to affirmatively plead in the complaint that the tenant is not a covered tenant, and would provide the defendant 30 days to respond to the complaint.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 The intent of the Legislature in enacting this act is to provide mortgage forbearance and foreclosure protections to residential rental property owners facing economic impacts due to the COVID-19 crisis.

SECTION 1.SEC. 2.

 Section 1947.01 is added to the Civil Code, immediately following Section 1947, to read:

1947.01.
 (a) Notwithstanding Sections 1947, 1950.5, or any other law, a landlord shall not apply a security deposit or monthly rental payment tendered by that tenant to a satisfaction of an obligation other than the prospective month’s rent if the obligation accrued during, or within 90 days after the termination of, a state of emergency related to COVID-19, during the effective time period unless the payment or security is specifically designated by the tenant in writing to be in satisfaction of the obligation.
(b) Any stipulation, settlement agreement, or other agreement, including a lease agreement, that conflicts with or purports to waive the provisions of this section is prohibited and is void as contrary to public policy.

(c)For purposes of this section, “state of emergency” means a state of emergency officially declared by the state, including, but not limited to, the state of emergency proclamation issued by the Governor on March 4, 2020, or a local emergency declared in the jurisdiction in which the property is located.

(c) For purposes of this section, the following definitions apply:
(1) “Covered tenant” means a tenant who has provided their landlord a written statement that they have had a loss of income or increased expenses, or both, as a result of the COVID-19 pandemic that has impacted their ability to fully pay rent, in accordance with paragraph (1) of subdivision (e) of Section 1161.6 of the Code of Civil Procedure.
(2) “Effective time period” means the time period between the date a state of emergency is initially declared and the earlier of either of the following:
(A) Ninety days after the termination of the state of emergency.
(B) April 1, 2021.
(3) “State of emergency” means an emergency related to the COVID-19 pandemic declared by the Governor pursuant to the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code).

SEC. 2.SEC. 3.

 Section 1947.02 is added to the Civil Code, immediately following Section 1947.01, to read:

1947.02.
 (a) (1)A covered tenant who failed to perform an obligation to pay rent that accrued during, or within 90 days after the termination of, a state of emergency related to COVID-19 during the effective time period shall not be deemed to be in default of the obligation, and no action to recover unpaid rent may be pursued, until 15 months after the state or local state of emergency is lifted. until 12 months after the effective time period.

(2)For purposes of this section, “state of emergency” means a state of emergency officially declared by the state, including, but not limited to, the state of emergency proclamation issued by the Governor on March 4, 2020, or a local emergency declared in the jurisdiction in which the property is located.

(b) (1) Nothing in this section shall prohibit a landlord from recovering unpaid rent by written agreement with the tenant, provided that the agreement does not exceed the actual amount of the debt, does not attorney’s fees or costs, late fees, penalties, or interest related to the unpaid rent, and the debt is offset by the amount of any payments, mortgage forbearance, mortgage forgiveness, or property tax reduction obtained from local, state, or federal entities that were provided to the landlord to offset, replace, or compensate the landlord for decreased rental income or provided as financial assistance intended to avoid foreclosure of the subject property.
(2) The agreement shall not require the tenant to vacate the premises as a condition of satisfying the unpaid rent obligation.
(3) A landlord shall notify the tenant in writing of their rights under this section before the agreement is signed.
(4) Any agreement with a tenant regarding the payment of rent shall be in writing and shall adhere to the requirements of Section 1632.
(c) A landlord shall not charge a tenant fees assessed for late payment of rent that accrued during the state of emergency or within 90 days thereafter, effective time period, nor may the landlord charge fees to a tenant for services previously provided by the landlord, as compensation for purported damages for late payment of rent that accrued during the state of emergency or within 90 days thereafter. effective time period. A landlord shall not provide different terms or conditions of tenancy or withhold a service or amenity based on whether a tenant repays or agrees to repay all or any portion of unpaid rent.
(d) A landlord shall not harass, threaten, or seek to intimidate a tenant in order to obtain a tenant’s payment or agreement to pay any portion of unpaid rent or to obtain a tenant’s vacation of the property because of a tenant’s failure to pay rent.
(e) Any stipulation, settlement agreement, or other agreement, including a lease agreement, that conflicts with or purports to waive the provisions of this section is prohibited and is void as contrary to public policy.
(f) For purposes of this section, the terms “covered tenant,” “effective time period,” and “state of emergency” have the definitions provided in Section 1947.01.

SEC. 3.SEC. 4.

 Section 1947.03 is added to the Civil Code, immediately following Section 1947.02, to read:

1947.03.
 (a) A housing provider, credit reporting agency, tenant screening company, or other entity that evaluates tenants on behalf of a housing provider shall not use an alleged default in rent that accrued during, or within 90 days after the termination of, a state of emergency related to COVID-19 during the effective time period as a negative factor for the purpose of evaluating creditworthiness or as the basis for a negative reference to a prospective housing provider, regardless of whether a report is received alleging default in the payment of rent.

(b)For purposes of this section, “state of emergency” means a state of emergency officially declared by the state, including, but not limited to, the state of emergency proclamation issued by the Governor on March 4, 2020, or a local emergency declared in the jurisdiction in which the property is located.

(b) For purposes of this section, the terms “covered tenant,” “effective time period,” and “state of emergency” have the definitions provided in Section 1947.01.

SEC. 4.SEC. 5.

 Section 1161.6 is added to the Code of Civil Procedure, immediately following Section 1161.5, to read:

1161.6.
 (a) Notwithstanding paragraph (2) of Section 1161, a covered tenant is not guilty of unlawful detainer if the alleged default in payment of rent accrued during, or within 90 days after the termination of, a state of emergency related to COVID-19. during the effective time period. It shall be unlawful to terminate a tenancy in retaliation for a default in rent that is subject to this subdivision. Nothing in this section shall prohibit a landlord from seeking to recover unpaid rent through other civil remedies or by written agreement with the tenant. It shall be unlawful to terminate a tenancy in retaliation for a default in rent that is subject to this subdivision. Any stipulation, settlement agreement, or other agreement, including a lease agreement, that conflicts with or purports to waive the provisions of this subdivision is prohibited and is void as contrary to public policy.
(b) (1) In any action to recover a debt arising from an alleged default in rent that accrued during, or within 90 days after the termination of, a state of emergency related to COVID-19, during the effective time period, the creditor shall set forth in the verified complaint or other document submitted under penalty of perjury the amount of any payments, mortgage forbearance, mortgage forgiveness, or property tax reduction during the relevant time period obtained from any local, state, or federal entity that were provided to the landlord to offset, replace, or compensate the landlord for decreased rental income or provided as financial assistance intended to avoid foreclosure of the subject property. In any judgment on the debt, the court shall offset the amount of these payments by the portion of the financial assistance fairly attributable to the rental unit in question. The defendant may present evidence that the creditor received relief designed to offset debt related to the rental unit in question, and any agreement in satisfaction of such a debt shall be void if it fails to account for receipt of payments described in this section.
(2) In any action described in subdivision (a), the creditor shall not be entitled to recover fees assessed against a tenant for late payment of rent.

(c)For purposes of this section, “state of emergency” means a state of emergency officially declared by the state, including, but not limited to, the state of emergency proclamation issued by the Governor on March 4, 2020, or a local emergency declared in the jurisdiction in which the property is located.

(c) In any unlawful detainer action based on paragraph (2) of Section 1161 filed within 12 months after the effective time period, the landlord shall be required to affirmatively plead in the complaint that the tenant is not a covered tenant and shall bear the burden of proof that the tenant did not provide the written statement specified in paragraph (1) of subdivision (e).
(d) In any unlawful detainer action based on paragraph (2) of Section 1161 due to nonpayment of rent filed within 12 months after the effective time period, notwithstanding Section 1167, the defendant’s response shall be filed within 30 days.
(e) (1) A tenant who is unable to satisfy all or a portion of the rent that has accrued during the effective time period due to a loss of income or increased expenses resulting from COVID-19 shall provide the following written statement in response to a written demand to cure the default in rent pursuant to paragraph (2) of Section 1161:
I declare that the following is true and correct:
I have had a loss of income and/or increased expenses as a result of the COVID-19 pandemic that has impacted my ability to fully pay the rent.
Signed:
Dated:
(2) The tenant shall provide the notice to their landlord as soon as reasonably practical but may provide the notice any time before judgment is entered.
(3) Any notice served pursuant to paragraph (2) of Section 1161 for an alleged default that occurred during the effective time period shall be accompanied by a document containing the written statement specified in paragraph (1) that the tenant may sign and return to the landlord.
(f) For purposes of this section:
(1) “Covered tenant” means a tenant described in paragraph (1) of subdivision (e) who has provided a written statement to their landlord.
(2) “Effective time period” means the time period between the date a state of emergency is initially declared and the earlier occurrence of either of the following:
(A) Ninety days after the termination of the state of emergency.
(B) April 1, 2021.
(3) “State of emergency” means an emergency related to the COVID-19 pandemic declared by the Governor pursuant to the California Emergency Services Act (Chapter 7 (commencing with Section 8550) of Division 1 of Title 2 of the Government Code).

SEC. 5.SEC. 6.

 The provisions of this bill are severable. If any provision of this bill or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.