Legal Q&A

A Day Late, A Dollar Short

written by Various Authors

Be smart by keeping honest tenants in your building and by not wasting good money pumping empty wells.

Q. Once the Tenant Relief Act expires next year, how should I collect the 25% of unpaid rent? What if the tenant vacates before then? Will I ever be able to collect the remaining 75% of unpaid rent?

A. First, everyone should note that the state legislature has strongly hinted that it may amend the Tenant Relief Act in January when the legislators reconvene after the year-end recess. With COVID cases ticking upward at the time of this writing, do not be surprised to encounter additional extensions of the rental payment pauses that have been ongoing since the pandemic’s beginning in March of 2020. Indeed, 2021 may be just as unnerving as this past year.

That said, at present, the rent payment protections are set to expire on January 31, 2021. Tenants failing to make rent payments due between March 1, 2020 through August 31, 2020 (“Period I Rent”) because of COVID-related hardships may never be evicted because of this nonpayment. Rather, an owner’s exclusive remedy to recoup Period I Rent is to seek a monetary judgment in court. Effective March 1, 2021, the jurisdictional limitations of the small claims courts in California will be lifted for missed rent, so owners may file an action without incurring attorney fees and have a quick hearing before a judge and without a jury beginning this spring. At any time, however, an owner can file a breach of lease lawsuit in regular superior court, although attorneys should be utilized in this venue since all of the complex procedural rules apply and either side may invoke a jury to hear the case.

For rent that became due between September 1, 2020 and January 31, 2021 (“Period II Rent”), tenants impacted by the pandemic need only pay 25% of the rental payments missed during this time period on or before January 31, 2021. Tenants do not have to pay 25% per month and are only required to make a payment by the end of January for the entirety of the 25% accrued amount. If this obligation is met, then the owner cannot evict the tenant for the remaining 75% of the missed Period II Rent but may instead pursue a monetary judgment in court (and, if desired, utilize the small claims department after March 1).

For both Period I Rent and Period II Rent, owners should begin the process of seeking collection by serving the new 15-Day Notice to Pay Rent or Quit SFAA forms to existing tenants. There are separate notice forms for each period. An additional form, Informational Notice of COVID-19 Tenant Relief Act of 2020, also known as Form CA-400, should also be issued. If the tenant has vacated, you need not go through the 15-day noticing. Instead, you may immediately file a breach of contract claim in regular court or, after March 1, in small claims court.

The bottom line, though, is that a lot of owners will have to make a tough business decision: Is it better to just move on, or do you want to expend time and resources filing court actions and trying to collect money from people that may be living outside of California and/or who are broke? Certainly, existing tenants should be treated in a different vein in terms of collection efforts, but even these folks may warrant some degree of rent forgiveness as the city’s rental prices are plummeting while the vacancy rates are setting monthly records. In other words, act smart by keeping honest tenants in your building and by not wasting good money pumping empty wells.

--Dave Wasserman

Q. What process should be followed if a potential tenant has been selected, but then something in their criminal history comes to light that might cause concern regarding the safety of the other tenants in the complex?

A. Criminal history is an important consideration in tenant selection, as landlords are liable for their tenants’ health and safety in a variety of ways. (Of course, misdemeanor marijuana possession is quite a bit different than felony assault, but we’ll assume for now that the criminal history ought to give cause for concern over bona fide safety issues.)

The language in your question needs some parsing. If the individual is a “tenant” who has been “selected,” it sounds like they are already in possession of the rental unit under a signed lease. In the future, you’ll want to conduct a thorough background check in advance of signing the lease and handing over keys, for precisely this reason. Assuming you performed the background check, the tenancy began, but you uncovered concealed information after the fact, you may have some recourse in the lease itself. The standard SFAA lease deems a misrepresentation in the rental applications to be a material breach and just cause for eviction. (Now, the misrepresentation should probably be severe enough to justify forfeiture, and you should talk to your attorney about current pandemic moratoria, but this is a start.)

If these facts don’t apply to your situation (e.g., you didn’t perform a background check in advance or your lease doesn’t contain these provisions), you may be in the unfortunate situation of waiting for the tenant to cause a problem before you can take action.

However, if your (prospective) tenant has been (informally) selected but hasn’t moved in yet, you’re in a much more defensible situation. You have possession of the apartment and you can stand behind a failed background check in refusing to go further. But if this is a non-dangerous individual, who just happens to have a criminal record, it would be worth considering housing discrimination law in your decision. For example, California’s Fair Employment and Housing Act and Unruh Act each provide protection against the denial of housing accommodations to certain classes. FEHA’s categories are enumerated and intuitive (like race, religion, gender, etc.), and they do not include criminal conviction as a class. Neither does Unruh, but its protections are broader and its protected classes can be judicially created. Because Unruh seeks to protect one against discrimination of one’s “personal characteristics,” things like felony convictions are not in themselves protected, but you should at least be mindful of how the information in that background check might lend itself to claims of discrimination.

—Justin A. Goodman

The information contained in this article is general in nature. Consult the advice of an attorney for any specific problem. Dave Wasserman is with Wasserman-Stern Law Offices and can be reached at 415-567-9600. Justin A. Goodman is with Zacks, Freedman & Patterson, P.C. and can be reached at 415-956-8100.