Judicial Council Rescinds Rule 1 on September 1, 2020

August 18, 2020

On August 13, 2020, the Judicial Council voted to end Emergency Rule 1 as of midnight on September 1, 2020.  The Judicial Council’s circulating order modifying Emergency Rule 1 allows new evictions to be filed beginning September 2, 2020. 

Emergency Rule 1 was originally adopted on April 6, 2020.  It prohibits courts throughout the state (until September 2, 2020) from issuing a summons for an unlawful detainer or entering a default judgment against a tenant except under the very limited exception of evictions that were deemed necessary by a judge to protect “public health and safety.”   

In response to the Judicial Council’s action, KTS filed an Application to Rescind Emergency Rule 1 on July 8, 2020, which in addition to highlighting the fact that Emergency Rule 1 was unconstitutional, included a lengthy list of examples where landlords had attempted to evict problem tenants for serious lease violations (including attempted murder, assault, prostitution, etc.), but the court refused to allow the case to move forward. KTS’s application included the names of over 100 “supporters,” comprised of owners, law firms, management companies, apartment associations and other real estate organizations. Thank you to everyone who agreed to be listed as a supporter on our application, and also to those who sent emails and letters to the Judicial Council in support of our application.

With Emergency Rule 1 set to sunset on September 1, 2020, does that mean landlords can file evictions for nonpayment of rent or other lease violations on September 2, 2020? Not necessarily. There are several factors to consider:

  1. Local Moratoria: Is your property subject to a local moratorium? Has that moratorium expired? The governor passed executive order N-71-20 that allows local governments to extend their eviction moratoria expiration date until September 30, 2020, and many (but not all) have done so. Even if a local moratorium has expired, there may be language in the moratorium that provides your tenant with a specific amount of time to repay rent that accrued while the moratorium was in effect.  KTS maintains a list of eviction moratoria at www.kts-law.com.
  2. CARES Act: On March 27, 2020, Congress passed the CARES Act which prohibited landlords from filing an eviction against tenants living in “covered dwellings” for 120 days. Although CARES expired on July 26, 2020, Congress could pass CARES II at some point which may include additional protections for tenants residing in covered dwellings. Landlords seeking to collect rent that accrued during the moratorium now that CARES has expired must serve a 30-day notice instead of a 3-day notice. Keep in mind that if there is still a local moratorium in effect, you may not be able to serve a notice even though CARES expired. A link to the CARES Act is included on the KTS spreadsheet of eviction moratoria at www.kts-law.com.
  3. Pending Legislation:There are two bills up for consideration in Sacramento at the moment: AB 1436 and SB 1410 and both are disastrous for landlords.
  • AB 1436 allows residents to defer rent until April 1, 2021. Tenants do not have to provide proof of a COVID-19 related financial hardship to be eligible for protection. They can “self-certify.” No late fees can be charged during this time. And if that wasn’t bad enough, for 12 months following April 1, 2021, landlords can’t evict for nonpayment of rent that accrued from March 4, 2020 to April 1, 2021, even if the tenant entered into a repayment agreement and then missed a payment. This bill also prevents landlords from reporting unpaid rent that accrued during March 4, 2020 to April 1, 2021. This bill has language to make it retroactive to March 4, 2020. Therefore, once it passes, if a landlord is in the middle of an eviction for  nonpayment of rent, the landlord may have to dismiss your case.
  • SB 1410 is equally as bad. The idea behind SB 1410 is that the landlord will forgive (not defer) rent that has accrued during the state of emergency once a COVID-19 eviction relief agreement is signed by the tenant. The tenant is supposed to then pay that rent back to the State of California over a 10-year period. The landlord, in place of the forgiven rent would receive a tax credit in 2024. This is not a voluntary program for the landlord as the bill requires the landlord to offer this agreement to the tenant. There is no specified date as to when the “state of emergency” will end.  Moreover, the bill will be in effect until December 31, 2034.  This bill does not just impact evictions related to nonpayment of rent. Under SB 1410, landlords are prohibited from evicting a tenant for any reason unless it is related to “health and safety.”  We’ve already seen the disastrous effects of that type of restriction while Emergency Rule 1 has been in effect. 

Landlords need to continue to contact their elected officials in Sacramento between now and September 1, 2020, to oppose both bills in their current forms as they are still subject to change.

4. Potential Executive Order: It is uncertain if either bill is passed in the next few weeks when they would take effect. If the effective date is January 1, 2021, the governor may sign an executive order extending  Emergency Rule 1-type protections to tenants in the interim.

The rescission of Emergency Rule 1 is an important victory for landlords whose voices continue to be ignored and discounted by our elected officials in this state. It is clear, however, that the fight is far from over and that what happens between now and September 1, 2020, could have devastating consequences on the rental housing industry for years to come.

Please let us know how KTS can assist you during these challenging times. Our attorneys are available to assist you with any questions about these issues. Feel free to contact us info@kts-law.com.

Kimball, Tirey & St. John LLP is a full service real estate law firm representing residential and commercial property owners and managers. This article is for general information purposes only. While KTS provides clients with information on legislative changes, our courtesy notifications are not meant to be exhaustive and do not take the place of legislative services or membership in trade associations. Our legal alerts are provided on selected topics and should not be relied upon as a complete report of all new changes of local, state, and federal laws affecting property owners and managers. Laws may have changed since this article was published.   Before acting, be sure to receive legal advice from our office. For contact information, please visit our website: www.kts-law.com.  For past Legal Alerts, Questions & Answers, and Legal Articles, please consult the resource section of our website.

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