Summary of AB 832 – Extension of the California COVID-19 Tenant Relief Act

Assembly Bill 832 (“AB 832”) was approved by the Governor of the State of California on June 28, 2021 and took effect immediately. AB 832 makes several changes to California law including the following: (1) AB 832 modifies and extends the eviction protections of the California COVID-19 Tenant Relief Act (“CTRA”), which were set to expire on June 30, 2021, for an additional three months to September 30, 2021; (2) AB 832 increases assistance under the state rental assistance program for an eligible household to 100% of unpaid rental debt accumulated on or after April 1, 2020; and (3) AB 832 enacts the COVID-19 Rental Housing Recovery Act, which modifies the requirements for notices demanding rent or other financial obligations of a tenant that become due between October 1, 2021 and March 31, 2022, and for unlawful detainer actions filed between October 1, 2021 and March 31, 2022. The following is a summary of many of the changes to California law made by AB 832.

A.     Extension of the California COVID-19 Tenant Relief Act. AB 832 extends the California COVID-19 Tenant Relief Act through September 30, 2021. The “transition time period” now means the time period between September 1, 2020, and September 30, 2021. Tenants now have until September 30, 2021 to tender one or more payments that, when taken together, are of an amount equal to or not less than 25 percent of each transition period rental payment demanded in one or more notices served pursuant to the CTRA and for which the tenant complied with the CTRA by timely delivering a declaration of COVID-19-related financial distress to the landlord. (Note: If the tenant is covered by a local eviction moratorium, the tenant may be entitled to additional time to pay.)

B.     New Mandatory Informational Notice. On or before July 31, 2021, a landlord must provide, in at least 12-point type, an updated informational notice to tenants who, as of July 1, 2021, have not paid one or more rental payments that came due during the covered time period (i.e., the time period between March 1, 2020, and September 30, 2021). This new informational notice contains information regarding the CTRA and the state rental assistance program. Failure to timely provide the new informational notice may affect the landlord’s ability to evict. The landlord may provide the notice in the manner prescribed by California Code of Civil Procedure Section 1162 (i.e., in the same manner as a Notice to Pay Rent or Quit) or by mail. A landlord may not serve a notice demanding COVID-19 rental debt (i.e., unpaid rent or any other unpaid financial obligation of a tenant under the tenancy that came due during the time period between March 1, 2020, and September 30, 2021) before the landlord has provided the new mandatory informational notice. The new mandatory informational notice may be provided to a tenant concurrently with a Notice to Pay Rent or Quit or Notice to Perform Covenant or Quit demanding COVID-19 rental debt that is served on or before September 30, 2021.

C.     New Requirements for Notices Demanding COVID-19 Rental Debt. Effective July 1, 2021, any Notice to Pay Rent or Quit or Notice to Perform Covenant or Quit that demands payment of unpaid rent or other financial obligations of the tenant that became due during the transition time period (i.e., the time period between September 1, 2020, and September 30, 2021) must include specified updated text in at least 12-point type. The updated text includes information regarding the CTRA and the state rental assistance program.

D.     Just Cause for Eviction. AB 832 extends “just cause” protections, as defined by AB 1482, for all residential tenancies until September 30, 2021, with limited exceptions. Evictions for demolition or substantial rehabilitation, as defined by AB 1482, are limited to circumstances necessary to comply with health and safety laws.

E.    Application of Security Deposit and Payments. AB 832 extends rules relating to the application of a security deposit and monthly rental payments. For the duration of any tenancy that existed during the covered time period (i.e., the time period between March 1, 2020, and September 30, 2021), the landlord shall not do either of the following:

(1) Apply a security deposit to satisfy COVID-19 rental debt, unless the tenant has agreed, in writing, to allow the deposit to be so applied. This rule does not prohibit a landlord from applying a security deposit to satisfy COVID-19 rental debt after the tenancy ends, in accordance with Civil Code Section 1950.5.

(2) Apply a monthly rental payment to any COVID-19 rental debt other than the prospective month’s rent, unless the tenant has agreed, in writing, to allow the payment to be so applied.

F.     Late Fees and New Fees. AB 832 extends rules relating to late fees and new fees. A landlord shall not, with respect to a tenant who has COVID-19 rental debt and who has submitted a declaration of COVID-19-related financial distress, do either of the following:

(1) Charge a tenant, or attempt to collect from a tenant, fees assessed for the late payment of that COVID-19 rental debt; or

(2) Increase fees charged to the tenant or charge the tenant fees for services previously provided by the landlord without charge.

G.     Temporary Reduction or Unavailability of Services or Amenities. AB 832 continues the law relating to the temporary reduction or unavailability of services or amenities. A landlord who temporarily reduces or makes unavailable a service or amenity as the result of compliance with federal, state, or local public health orders or guidelines shall not be considered to have violated the rental or lease agreement, nor to have provided different terms or conditions of tenancy or reduced services for purposes of any law, ordinance, rule, regulation, or initiative measure adopted by a local governmental entity that establishes a maximum amount that a landlord may charge a tenant for rent.

H.     Tenant Screening. AB 832 continues the law that a housing provider, tenant screening company, or other entity that evaluates tenants on behalf of a housing provider is prohibited from using an alleged COVID-19 rental debt as a negative factor for the purpose of evaluating a prospective housing application or as the basis for refusing to rent a dwelling unit to an otherwise qualified prospective tenant.

I.     Sale or Assignment of COVID-19 Rental Debt. AB 832 extends and modifies the law relating to the sale or assignment of unpaid COVID-19 rental debt to the following:

(1) No person shall sell or assign any unpaid COVID-19 rental debt for the time period between March 1, 2020 and September 30, 2021. This law remains in effect until October 1, 2021, and as of that date is repealed; and

(2) No person shall sell or assign any unpaid COVID-19 rental debt for the time period between March 1, 2020 and September 30, 2021, of any person who would have qualified for rental assistance funding provided by the Secretary of the Treasury pursuant to Section 501 of Subtitle A of Title V of Division N of the federal Consolidated Appropriations Act, 2021 (Public Law 116-260), or Section 3201 of Subtitle B of Title III of the federal American Rescue Plan Act of 2021 (Public Law 117-2), if the person’s household income is at or below 80 percent of the area median income for the 2020 or 2021 calendar year.

J.     Rules for Actions to Recover COVID-19 Rental Debt. AB 832 extends the law that in any action seeking recovery of COVID-19 rental debt (except unlawful detainer actions), the plaintiff is required to attach to the complaint documentation showing that the plaintiff has made a good faith effort to investigate whether governmental rental assistance is available to the tenant, seek governmental rental assistance for the tenant, or cooperate with the tenant’s efforts to obtain rental assistance from any governmental entity, or other third party pursuant to California Civil Code Section 1947.3(a)(3). In an action subject to this requirement, the court may reduce the damages awarded for any amount of COVID-19 rental debt sought if the court determines that the landlord refused to obtain rental assistance from the state rental assistance program, if the tenant met the eligibility requirements and funding was available. An action to recover COVID-19 rental debt that is subject to this law cannot be commenced before November 1, 2021. This law does not apply to an action to recover COVID-19 rental debt pending before the court as of January 29, 2021. However, such actions are stayed until November 1, 2021. This law does not apply to unlawful detainer actions filed pursuant to Code of California Civil Procedure Section 1161. Actions for breach of contract to recover rental debt that were filed before October 1, 2020, are not stayed and may proceed, subject to certain restrictions.

K.     Limitation on Attorney’s Fees. AB 832 extends the law that, in any action to recover COVID-19 rental debt brought as a limited or unlimited civil case, the court shall not, under ordinary circumstances, award reasonable attorneys’ fees to a prevailing party that exceed $500 if the matter is uncontested and $1,000 if the matter is contested. This section of AB 832 remains in effect until October 1, 2025.

L.     Small Claims Actions. AB 832 extends the earliest date for filing an action to recover COVID-19 rental debt in small claims court to November 1, 2021.

M.     Unlawful Detainer Actions

1.     New Statement Mailed by Court Clerk. Upon the filing of an unlawful detainer action, the court clerk is required to mail a notice to each defendant named in the action that includes specified information. AB 832 requires the court clerk to include the following statement for a notice sent out between October 1, 2021 and March 31, 2021: “IMPORTANT NOTICE FROM THE STATE OF CALIFORNIA – YOU MUST TAKE ACTION TO AVOID AN EVICTION: As part of the state’s COVID-19 relief plan, money has been set aside to help renters who have fallen behind on rent or utility payments. If you are behind on rent or utility payments, YOU SHOULD COMPLETE A RENTAL ASSISTANCE APPLICATION IMMEDIATELY! It is free and simple to apply. Citizenship or immigration status does not matter. You can find out how to start your application by calling 1-833-430-2122 or visiting http://housingiskey.com right away.”

2.     Requirement for Entry of Unlawful Detainer Judgment. AB 832 extends the requirement that, in any unlawful detainer action seeking possession of residential rental property based on nonpayment of rent or any other financial obligation under the lease, the court cannot enter a judgment in favor of the landlord unless the landlord verifies all of the following under penalty of perjury: (a) That the landlord has not received rental assistance or other financial compensation from any other source corresponding to the amount demanded in the notice underlying the complaint; (b) That the landlord has not received rental assistance or other financial compensation from any other source for rent accruing after the date of the notice underlying the complaint; (c) That the landlord does not have any pending application for rental assistance or other financial compensation from any other source corresponding to the amount demanded in the notice underlying the complaint; and (d) That the landlord does not have any pending application for rental assistance or other financial compensation from any other sources for rent accruing after the date of the notice underlying the complaint. This requirement applies to rent or other financial obligations under a lease that accrued between April 1, 2020, and September 30, 2021.

3.     Prohibition on Retaliation. AB 832 extends to October 1, 2021 the prohibition against landlords bringing an action for unlawful detainer based on a cause of action other than nonpayment of COVID-19 rental debt for the purpose of retaliating against a lessee because the lessee has a COVID-19 rental debt.

4.     Restrictions on Access to Court Records. AB 832 extends indefinitely restrictions on access to unlawful detainer cases filed between March 4, 2020 and September 30, 2021 based on an alleged default in the payment of rent, and extends indefinitely limitations on access to civil records for actions seeking recovery of COVID-19 rental debt.

N.     Local Eviction Moratoriums. Any ordinance, resolution, regulation, or administrative action adopted by a city, county, or city and county in response to the COVID-19 pandemic to protect tenants from eviction is subject to, among other rules, all of the following: (1) Any extension, expansion, renewal, reenactment, or new adoption of a measure, that occurs between August 19, 2020, and March 31, 2022, shall have no effect before April 1, 2022; and (2) Any provision which allows a tenant a specified period of time in which to repay COVID-19 rental debt shall be subject to all of the following: (A) If the provision in effect on August 19, 2020, required the repayment period to commence on a specific date on or before May 1, 2022, any extension of that date made after August 19, 2020, shall have no effect; (B) If the provision in effect on August 19, 2020, required the repayment period to commence on a specific date after May 1, 2022, or conditioned commencement of the repayment period on the termination of a proclamation of state of emergency or local emergency, the repayment period is deemed to begin on May 1, 2022; and (C) The specified period of time during which a tenant is permitted to repay COVID-19 rental debt may not extend beyond the period that was in effect on August 19, 2020. In addition, a provision may not permit a tenant a period of time that extends beyond May 31, 2023, to repay COVID-19 rental debt.

O.     New COVID-19 Rental Housing Recovery Act. AB 832 enacts the COVID-19 Rental Housing Recovery Act, which establishes new requirements for the recovery of a rental debt of a tenant under a tenancy that came due between October 1, 2021, and March 31, 2022 (“COVID-19 recovery period rental debt”) and for unlawful detainer actions filed between October 1, 2021, and March 31, 2022.

1.     New Notice Requirements. Any Notice to Pay Rent or Quit or Notice to Perform Covenant or Quit that demands payment of COVID-19 recovery period rental debt must comply with the following requirements: (a) The time period in which the tenant may pay the amount due or deliver possession of the property shall be no shorter than three days, excluding Saturdays, Sundays, and other judicial holidays; (b) The notice shall include all of the following: (i) The amount of rent demanded and the date each amount became due; (ii) The telephone number and internet website address of the pertinent government rental assistance program (which means the applicable government rental assistance program for the city, county, or city and county in which the property at issue is located); and (iii) Specified updated text in at least 12-point type. The updated text includes information regarding the state rental assistance program.

2.     New Requirements for Unlawful Detainer Actions Filed on or After October 1, 2021 and before March 31, 2022. On or after October 1, 2021, and before March 31, 2022, in an unlawful detainer action pertaining to residential real property and based, in whole or in part, on nonpayment of rental debt that accumulated due to COVID-19 hardship (which means rent or other financial obligations of the tenant that became due during the time period between March 1, 2020, and March 31, 2022), all of the following shall apply:

(a)      Additional Requirements for Issuance of Summons. A court shall not issue a summons on a complaint for unlawful detainer that seeks possession of residential real property based on nonpayment of rental debt that accumulated due to COVID-19 hardship unless the plaintiff, in addition to any other requirements provided by law, also files any of the following:

(1)      Verification Landlord Completed an Application for Government Rental Assistance but the Application Was Denied. Both of the following: (A) A statement verifying, under penalty of perjury, that before filing the complaint, the landlord completed an application for government rental assistance to cover the rental debt demanded from the defendants in the case, but the application was denied; and (B) A copy of a final decision from the pertinent government rental assistance program denying a rental assistance application for the property at issue in the case.

(2)      Verification Landlord Completed an Application for Government Rental Assistance but Tenant Has Not Completed Application. A statement, under penalty of perjury, verifying that all of the following are true: (A) Before filing the complaint, the landlord submitted a completed application for rental assistance to the pertinent government rental assistance program to cover the rental debt demanded from the defendants in the case; (B) Twenty days have passed since the later of the following: (i) The date that the landlord submitted the application; (ii) The date that the landlord served the tenant with the three-day notice underlying the complaint; (C) The landlord has not received notice or obtained verification from the pertinent government rental assistance program indicating that the tenant has submitted a completed application for rental assistance to cover the rental debt demanded from the defendants in the case; and (D) The landlord has received no communication from the tenant that the tenant has applied for government rental assistance to cover the unpaid rental debt demanded from the defendants in the case.

(3)      Verification Tenancy Was Initially Established on or After October 1, 2021. A statement, under penalty of perjury, that the rental debt demanded from the defendant in the complaint accumulated under a tenancy that was initially established on or after October 1, 2021. A tenancy is initially established when the tenants first lawfully occupy the premises. The following do not initially establish a tenancy: (i) The renewal of a periodic tenancy; (ii) The extension of an existing lease or rental agreement; or (iii) The execution of a new lease or rental agreement with one or more individuals who already lawfully occupy the premises.

For the purpose of the above requirements, “final decision” means either of the following determinations by a government rental assistance program regarding an application for rental assistance: (A) The application is an approved application; (B) The application is denied for any of the following reasons: (i) The tenant is not eligible for government rental assistance; (ii) The government rental assistance program no longer has sufficient rental assistance funds to approve the application; (iii) The application for government rental assistance remains incomplete 15 days, excluding Saturdays, Sundays, and other judicial holidays, after the landlord properly completed the portion of the application that is the responsibility of the landlord because of failure on the part of the tenant to properly complete the portion of the application that is the responsibility of the tenant.

“Final decision” does not include any of the following: (A) The rejection of an application as incomplete or improperly completed by a landlord. (B) Notification that an application is temporarily pending further action by the government rental assistance program or the applicant. (C) Notification that the landlord or tenant applied to the wrong government rental assistance program for the property or rental debt at issue.

(b)      New Court Form. A statement under penalty of perjury described above must be made on a form developed or revised by the Judicial Council of California for this purpose if the Judicial Council of California determines that this requirement is necessary to accomplish the purpose of the statement.

(c)      New Requirements for Entry of Judgment. A judgment shall not issue in favor of the plaintiff unless the court finds, upon review of the pleadings and any other evidence brought before it, that both of the following are true: (1) Before filing the complaint, the plaintiff completed an application to the pertinent government rental assistance program for rental assistance to cover the rental debt demanded in the complaint; and (2) The plaintiff’s application for rental assistance was denied because of lack of eligibility, lack of funding, or the application remained incomplete due to the tenant’s failure to properly complete the portion of the application that is the responsibility of the tenant for 15 days, excluding Saturdays, Sundays, and other judicial holidays, after the landlord properly completed the portion of the application that is responsibility of the landlord.

(d)      Service of Verification on Tenant. In addition to the summons, the complaint, and any other required document, the plaintiff shall serve the defendant with copies of the statement and final decision filed with the court.

(e)      Tenant’s Right to Contest Whether Landlord Has Met the New Requirements. If the defendant contests whether the plaintiff has met these requirements, the plaintiff shall bear the burden of proving to the court that the plaintiff has met those requirements.

3.     Tenant May Avoid Eviction If Approved for Government Rental Assistance Before Sheriff Lockout. In an unlawful detainer action, any time before restoration of the premises to the landlord (i.e. a Sheriff lockout), a tenant may apply to the court to stay the proceedings and restore the tenancy if: (a) The complaint for unlawful detainer is based on a demand for payment of rental debt that accumulated due to COVID-19 financial hardship; (b) The tenant submits verification to the court that a government rental assistance program has approved an application for rental assistance corresponding to part or all of the rental debt demanded in the complaint; and (c) The approved payment from the rental assistance program, together with any additional payments made by the tenant, constitute full payment of the rental debt demanded in the complaint.

P.     State Rental Assistance Program

1.     Streamlining of Rental Assistance Programs. Each government rental assistance program is required to, by no later than September 15, 2021, develop mechanisms, including, but not limited to, telephone or online access, through which landlords, tenants, and the court may verify the status of an application for rental assistance based upon the property address and a unique application number and obtain copies of any determination on an application for rental assistance.

2.     Increase In Rental Assistance. AB 832 sets the compensation for an eligible household’s unpaid rental debt accumulated on or after April 1, 2020 at 100%. Landlords who have already received an 80% payment from the rental assistance program will automatically qualify to receive an additional 20% payment without having to resubmit an application. If a landlord refuses to participate in the local or state rental assistance program, qualified residents will receive the 100% payment directly and are required to remit that payment to the landlord within 15 days, excluding Saturdays, Sundays, and other judicial holidays.

3.     Tenant No Longer in Possession. AB 832 authorizes rental assistance for eligible households that no longer occupy the residential unit.

4.     Eligibility Requirements Remain the Same. AB 832 does not make any changes to the eligibility requirements for the Rental Assistance Program. Households with an income at or below 80% of the area median income are eligible for rental assistance.

The law firm of Wallace, Richardson, Sontag & Le, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.