California Eviction Relief Bill Extended Through January 31st, 2021

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. 

What Are The Unseen Costs Of California’s Eviction Moratorium?

One common theme that’s been played out in the media across California over the last three months is that landlords should cancel rent, and everything possible should be done to help tenants.

As the State of California continues to struggle with Coronavirus, the eviction moratorium has been extended until the end of September, giving some tenants the ability to continue living rent free.

Even though the eviction moratorium was necessary during the early days of Covid-19, to keep people off the streets and slow the spread of the virus, the reality is that it’s been brutal for landlords across the state.

The Unforeseen Costs Of California’s Eviction Moratorium

One common theme that’s been played out in the media across California over the last three months is that landlords should cancel rent, and everything possible should be done to help tenants.

Sadly, even though there are some institutional investors own rental properties across California who have the ability to forgive back rent, many of the landlords in the state that have been hardest hit are smaller, “mom and pop” landlords who rely on the monthly rent from their rental properties to survive.

In the past, eviction has always been a legal protection that landlords could fall back on when their tenants didn’t pay their rents, but now that some tenants have not paid in months, eviction is not an option, and the only option landlords have is to wait until the eviction moratorium has ended.

Could more landlords choose to forgive their tenants back rent in favor of tax deductions or other incentives? While some landlords have been able to do just that, smaller landlords can’t walk away from money owed that easily. After not collecting rent for months, they face the real possibility of mortgage defaults in the coming weeks.

What Comes Next?

As of July 2020, more landlords across the State of California are challenging the eviction moratorium in the courts. This has led the Governor to leave the matter in the hands of local municipalities, so it’s unlikely that we will see any legal action that stops the eviction moratorium any time soon.

The State of California continues to “kick the can” and push off evictions for a few more months in the hope that the economy will improve and more people will go back to work but the opposite is happening right now.

More industries are going into lockdown in California, schools remain closed, and it’s unlikely that the battle against Coronavirus will be won anytime soon.

With the next expiration of the eviction moratorium approaching on September 30th, along with elections in November, this fall will likely be one that everyone remembers since it’s a time in history when everything is on the line.

Contact GoldenWest Management

To learn more about what’s happening with the rental market in California, or to speak with us about our property management services, contact us today by calling (866) 545-5303 or click here to connect with us online.