Rental relief in California- SB 91 COVID 19 Relief Bill Signed by Newsom
On January 29th, 2021 Governor Newsom signed Senate bill SB-91 COVID-19 Relief which replaces California’s COVID-19 Tenant relief act of 2020 or AB-3088 that was set to expire this Sunday on January 31st, 2021.
The Tenant relief act, AB-3088 allowed California tenants affected by COVID-19 up to Jan. 31st to pay landlords 25% of rent owed since September 1st, 2020 or face possible eviction.
The new bill, SB-91 extends AB-3088 from Jan. 31st, 2021 to June 30th, 2021 giving renter’s more time to pay back accrued rent.
How does rent relief work?
Rent relief is being provided through $2.6 Million dollars of Federal aid. According to SB-91, the funds can be used to provide up to 80% of rent owed to landlords. The bill only applies to unpaid rents accrued from April 1st, 2020 to March 31st, 2021.
Landlords will have until February 28th 2021 to provide an informational notice to tenants that are behind on rent payments, in order to comply with the funding rules. Tenants and landlords will be able to apply for the funding starting in March 2021.
Expect delays in the process, as with all new government programs.
If the landlord accepts the funds, the tenant is still required to pay 25% of the owed rent by June 30th, 2021. The intent is for both parties to benefit. The landlord will be able to pay their mortgage, thus keeping their property, while the tenant will avoid eviction and pay less than what they owed for rent.
The landlord can decline the funds from SB-91 if they intend to collect all of the money owed from the tenant, or are seeking eventual eviction. The bill does not force owners to accept rent relief.
Who qualifies for rent relief?
Not all situations will qualify for funding from the new bill. In order to qualify for rent relief under SB-91, the tenant must have earned less than 80% of the area’s median income in 2020.
In Los Angeles 80% is about: $61,840,
San Bernadino/Riverside: $60,240,
and San Diego: $74,160
But First:
The federal rules for using the money require the State of California to prioritize money for low income renters, which means they must make 50% of the area’s median income.
In Los Angeles 50% is about: $38,650,
San Bernadino/Riverside: $37,650
and San Diego: $46,350.
After the 50% group of tenants is allocated money, then the 80% group is addressed. Anyone above 80% of the median income does not qualify.
Additionally, renters must have proof that the inability to pay was due to a “COVID 19-related financial distress” hardship.
According to the Tenant Relief Act AB-3088 that includes:
Loss of income due to COVID-19Increased out-of-pocket expenses directly related to performing essential work during the COVID-19 pandemic.Increased expenses directly related to the health impact of COVID-19.Childcare responsibilities or responsibility to care for an elderly, disabled or sick family member directly related to the COVID-19 pandemic that limit your ability to earn income.Increased costs for childcare or attending to an elderly, disabled or sick family member directly related to the COVID-19 pandemic.Other circumstances directly related to the COVID-19 Pandemic that have reduced your income or increased your expenses.
If renters fall into one of these categories, and they made less than 80% of the area’s median income in 2020, and pay their 25% of rent owed by June 30th, 2020 they should qualify for the rent relief funds.
Can you still be evicted if you don’t pay your rent?
According to the California SB-91 Covid-19 Relief Bill, tenants can prevent eviction if they have paid 25% of the rent owed, have a COVID-19 financial hardship, and had an income of less than 80% of the area’s median income. If the Landlord does not accept the funds from SB-91 they can still pursue eviction in the future.