What is AB 3088?
Assembly Bill 3088 (AB 3088) is a legislation known as the “Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020.” It was signed into law by Governor Gavin Newsom in 2020 and took effect immediately. AB 3088 was enacted in response to the economic hardships caused by the COVID-19 pandemic and aimed to provide relief and stability for tenants, homeowners, and small landlords in California. The law introduced various provisions to address eviction protections, rent repayment plans, and foreclosure prevention measures.
As expected, Governor Gavin Newsom signed Assembly Bill 3088, also known as the “Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020,” late on Monday night. The law is now in effect, and it includes the following important provisions.
On August 28, 2020, the Governor’s office, along with prominent members of the Assembly and Senate, introduced a temporary and interim solution aimed at offering relief to tenants and homeowners. The negotiations on this bill involved the active participation of the Apartment Association of Greater Los Angeles and its associated apartment associations. While the bill may have its shortcomings as a short-term measure, it acknowledges the need for state legislation to provide financial assistance to both renters facing vulnerability and rental housing owners who play a crucial role in ensuring Californians have shelter during the pandemic and the resulting governmental actions.
As previously mentioned, this legislation serves as a temporary “stopgap” measure designed to bridge the gap until the end of January, allowing the Legislature the necessary time to formulate a more lasting solution. Specifically, the legislation applies to rent payments made between March 1, 2020, and January 31, 2021, encompassing this specific timeframe.
The protected period spans from March 1, 2020, through August 31, 2020, during which rent payments are still required. Within this timeframe, property owners are obligated to furnish renters with a written declaration form. This form informs tenants that although rental payments are due, they cannot be subjected to eviction if they declare experiencing financial hardship due to COVID-19. Additionally, the bill mandates that individuals earning equal to or above 130% of the Area Median Income (AMI) must provide supplementary evidence of their hardship. The determination of 130% AMI is based on the Official State Income Limits for 2020, as published by the Department of Housing and Community Development, specific to the county in which the residential rental property is situated.
The transitional period extends from September 1, 2020, to January 31, 2021. Within this timeframe, renters who have been unable to make rental payments are protected from eviction if they pay 25% of their rent either on a monthly basis or cumulatively by January 31, 2021.
Renters retain the responsibility to repay any outstanding rent, but until January 31, 2021, it cannot serve as grounds for eviction.
According to the bill, until February 1, 2025, small claims courts have jurisdiction over all COVID-19 rental debt recovery cases, regardless of the amount being claimed. This provision exempts COVID-19 rental debt claims from the restriction on filing more than two small claims actions. While small claims court remains a viable option, rental housing owners still have the option to file a lawsuit in the civil division of the Superior Court. It is advisable for rental housing owners seeking to recover unpaid rent to seek guidance from their attorney to understand the advantages and potential risks associated with pursuing a case in small claims court.
Evictions necessary to ensure health and safety will be permitted, and evictions that were initiated before March 1, 2020, may proceed. Starting from February 1 onwards, property owners are required to provide a written notice of eviction with a 15-day period (excluding weekends and judicial holidays) in order to proceed with evicting a tenant.
Mortgage Relief and Forbearance
The bill incorporates mortgage forbearance provisions specifically designed for small owner-occupied rental property owners. This legislative measure aims to safeguard the interests of these small property owners. However, it is important to note that the forbearance only applies to properties meeting specific criteria. These properties must be owned by an individual who owns no more than three residential real properties, or by a group of individuals collectively owning no more than three residential real properties, with each property comprising no more than four dwelling units. Furthermore, the forbearance is limited to first position security instruments, such as a deed of trust or a similar lien.
Future Rental Assistance Programs
The bill instructs the State Consumer Services and Housing Agency to develop a rent assistance program, a cause we have been actively supporting throughout the year. We have obtained a commitment from the Governor’s office to collaborate on the creation of a rental assistance program in the future, contingent upon receiving federal funding. This commitment has been an integral part of the negotiations surrounding this bill. Moreover, we have already initiated communication with the Deputy Secretary of the Agency and have scheduled meetings with the Agency for the upcoming month.
During the past week or so, the Apartment Association of Greater Los Angeles actively engaged in the process and successfully secured notable amendments incorporated into the bill. These amendments aim to offer short-term relief to rental property owners. However, it is important to acknowledge that, like any compromise bill, not all the advocated provisions could be included in the final version.
We succeeded in integrating several provisions into the bill, such as the obligation for certain renters to provide documentation when asserting their inability to pay rent, means testing, limited preemption of local eviction moratoria that are adjusted after the bill’s enactment, and a commitment to establish rental assistance programs in the future. Moving forward, we will persist in our efforts to advocate for state government legislation that alleviates the entire financial burden of the COVID-19 pandemic and the mandates imposed by state and local governments from falling solely on rental property owners.
Filed under: News and Updates