Earlier this month, California passed AB3088, a new Tenant Assistance Act that was a compromise between tenants and landlords. Known as the 2020 Tenants' Facility and Stabilization Law, the new law provides security and some protection for small landlords to tenants. It extends the eviction moratorium until January and requires tenants to provide evidence of loss of income due to COVID-19 in exchange for non-payment. In addition, tenants must pay at least 25% of the rent during the moratorium period. The law was well received by landlords.
"The biggest advantage of AB3088 is that it provides security in these uncertain times." Sean Burton, CEO of City viewtells GlobeSt.com. “The regulatory landscape across California has been a patchwork of local regulations, and AB3088 enables a streamlined government approach that provides tenants and landlords with more security. In some countries, AB3088 offers tenants additional protection not provided by local regulations, while in other countries certain tenant protection measures can be restricted. However, having a unified nationwide approach will reduce the confusion and uncertainty that many tenants and landlords have faced. In addition, AB3088 provides for termination obligations, which enable everyone to become aware of the duties and protection of tenants and landlords, and thus contribute to a mutual understanding of the requirements. "
While this new bill increases the burden of proof of non-payment and requires some rental payment, it can still affect rental income. At CityView, however, the rental collections have stayed healthy through the pandemic and the owner has worked with tenants. “We were pleasantly surprised that our collection percentages were in the high 80s to mid to high 90s, depending on the asset class. We haven't seen the high arrears we might have expected at the start of the COVID-19 pandemic, ”says Burton. “We see real cooperation among tenants and a willingness to pay when this is possible. For those tenants for whom COVID has affected their ability to pay all or part of their rent, we have remained in constant communication and working with them. We will continue to work with all of our tenants as we navigate these uncertain times. "
This is the first expansion of tenant protection, but with the pandemic seemingly unwavering, it's hard to say if there will be additional expansions. Burton agrees that the additional legislation is difficult to predict. "So much of the continued response depends on future conditions that are not yet known," he says. “The ongoing rates of infection, the success and timing of a vaccine, and the outcome of the elections, including at the federal, state and local levels, as well as a number of other factors will influence the ongoing effects of COVID-19 and how a society responds to these future terms. "
However, he adds that aspects of the bill show that lawmakers are trying to strike a balance. "The 25% requirement under AB3088 shows that the state wants to strike a balance between providing tenant support and providing income to landlords who are still required to maintain buildings and pay debt servicing," he says. “We have not only managed to rely on the law, but have also built a partnership and open dialogue with our tenants through frequent communication. This approach has allowed us to keep our collections high while we work to help the tenants who have told us they are being affected by COVID-19. "
While landlords accepted the bill, many tenant rights groups say the bill does not go far enough to provide protection for tenants. However, Burton says he saw a positive reaction to the new law. "In general, I believe that a lot of people feel that this was a balanced approach to the problem as it provides security for all parties, provides the necessary relief to tenants and allows some limited payments to be made to landlords to help them maintain them to support their ongoing commitments. " he says. “While some groups on both sides of the argument oppose it, either believing it hasn't gone far enough or gone too far for tenants, it appears to have achieved its goal in the multi-family area of providing a unified nationwide approach to providing protection the tenant before short-term evictions. "
