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.

AB 1436 – Learn More About The Latest California Rent Protections Bill

With the end of the State-wide eviction moratorium in California fast approaching, lawmakers have been scrambling to come up with ways to avoid a possible “eviction tsunami” that is poised to hit California once landlords are legally able to move forward with pursuing evictions in the courts once again.

Even though we reported recently that Doug Michie, a Ventura based lawyer, filed a lawsuit to stop the State of California’s eviction moratorium, this move didn’t last long.

AB 1436 – Could Allow Tenants To Delay Paying Back Rent For 15 Months

Assembly member David Chiu from San Francisco authored AB 1436, a bill which states that tenants cannot be evicted due to their unpaid rent which was accrued during the COVID-19 / Coronavirus emergency.

The bill also states that tenants will have 15 months after the end of Coronavirus to pay back all of their accrued rent while giving landlords the option to pursue eviction if their tenants miss paying rent in the future.

Even though many landlords in California have been making payment arrangements with their tenants who are behind on their rent. AB 1436 also allows landlords and tenants to make written repayment arrangements while adding safeguards so that tenants don’t end up owing more money than what they accrued during COVID-19.

What About Smaller “Mom and Pop” Landlords?

AB 1436 sounds like a fair and reasonable bill but is keeping the courts closed to aggrieved landlords the right thing to do?

With many “mom and pop” landlords in California depending on the income that they receive from their rental properties, it’s easy to see that AB 1436 could potentially create a “wave of defaults and foreclosures” since most landlords won’t be able to survive if they cannot collect the rent that’s owed to them.

July 2020 Is Going To Be A Vital Month In California’s History

Lawmakers are intent on stopping mass evictions but with little effort being made to protect the rights of owners, the future for the rental market looks bleak in California, to say the least.

If owners start defaulting, or selling their rental properties, this could lead to a further strain on the supply of rental properties in California and higher rents than what we have right now.

Regardless if you support the plight of tenants in California, landlords, or both, July 2020 is shaping up to be one of the most important months in California’s history as lawmakers work hard to stop mass eviction from happening in August.

With the end of California’s eviction ban scheduled for July 28th, it’s likely that we will see a “flurry of activity” in July as lawmakers work hard to protect tenants from evictions but that legislation could also adversely affect owners at the same time.

Either way, we encourage you to follow our blog for the latest updates on what’s happening in the California rental market so that you will be able to read the latest news affecting you.

Contact GoldenWest Management

Do you need property management for your California rental property? Or do you own rentals in Las Vegas or Phoenix that need property management as well? If so, we can help!

Our company specializes in property management and has the best property management team that will serve all of your needs. To learn more about the services that we can offer you, contact us today by calling (866) 545-5303 or click here to connect with us online.