Governor Gavin Newsom recently signed new legislation extending the eviction ban in California through January 31st, 2021.
This move only delays evictions for a few more months as State and Federal lawmakers work hard to come up with a plan for how to deal with evictions and get the rental market in California back on track.
Most analysts see the Governors eviction moratorium extension as a ‘bridge’ to a more permanent solution. As evictions are not allowed to continue, many landlords across the State are suffering economically due to not being able to collect rent for months.
The good news about the Governor’s recent action is that even he agrees something needs to be done to help renters and landlords across the state and the nation. The big question is: what exactly can be done to help both parties at the same time?
How Will The New Eviction Ban Work?
Tenants who were not able to pay their rent from March 1st through August 31st must sign a document which states that they are unable to pay their rent due to financial hardship from COVID-19. Some tenants who earn over $100,000 annually would have to show proof of their financial hardship.
What’s different about this extension of the eviction ban is tenants who qualify for the eviction ban must still pay 25% of their rent. They cannot continue living in their rental properties without paying anything.
Sadly, Governor Newsom’s new eviction ban extension doesn’t delay foreclosures. Unless a landlord has signed up for mortgage deferral with their lender, they can expect their mortgage to end up in foreclosure if they remain unable to pay.
What Comes Next?
With State lawmakers not scheduled to return to work until January 2021, the first of the year will likely be the biggest month that we’ve seen in a long time. Lawmakers will be scrambling to come up with solutions to stop the eviction crisis while landlords seek evictions.
There is talk about creating a plan that offers tax credits to landlords who were paid just 25% of the rent. A similar plan failed to be approved this summer so it’s likely we may see a flurry of ideas being proposed in the greater Southern California rental market in the coming months.
Learn More About GoldenWest Management – Your Local Property Management Company
At GoldenWest Management, we stay on top of what’s happening with the rental market in California so our owner clients can have confidence we’re aware of all the issues that might affect their rental properties.
With locations in San Diego, Phoenix, and Las Vegas, we make it possible for owners to build a portfolio of rental properties while having confidence that they will receive the same level of service regardless of where their rental properties are located.
To learn more about the property management services that we can offer you, contact us today by calling (866) 545-5303 or click here to connect with us online.