California Commercial Eviction Moratorium Update - Laverty Chacon

Commercial Property Eviction Moratorium Extended in Santa Clara County

admin  /   April 29, 2021

Commercial Property Eviction Moratorium Extended In Santa Clara County

If you’re operating commercial property or renting commercial property in Santa Clara County, it’s important to understand the recent ordinance passed by Santa Clara County, which extended the commercial property eviction moratorium in the county. Our team will be reviewing the basics of this commercial eviction moratorium and answering a few FAQs about how it will affect both tenants and landlords.

Understanding The Commercial Eviction Moratorium Extension In Santa Clara County

Santa Clara County recently passed an Urgency Ordinance to amend Ordinance No. NS.9287, which was previously extended by Ordinance No. NS-9.288. This extended the commercial eviction moratorium through June 30, 2021.

In addition to this, the recent change to the ordinance extended payment plan intervals for commercial renters, who have up to 6 months after the moratorium expires to pay half of their owed past-due rent, and 1 year (12 months) after the moratorium expires to repay past-due rent in full.

This law also extends protections to tenants and outlines damages, civil fines, and other penalties that may be leveraged against landlords who try to deny small business tenants their rights under the commercial eviction moratorium, or who attempt to retaliate against the tenants for taking advantage of the commercial eviction moratorium in Santa Clara County.

The experts at Laverty Chacón have provided explanations and answers to some of the most commonly asked questions:

How Does The Commercial Eviction Moratorium Affect Landlords?

Landlords are still able to collect rent as per their rental agreements. However, they are not allowed to evict small business tenants if they do not pay rent – as long as the tenant qualifies for the moratorium due to a substantial loss of income, or costly out-of-pocket medical expenses incurred due to the COVID-19 pandemic.

Do Small Business Tenants Still Have To Pay Rent?

Yes, small business tenants still have to pay rent unless they have suffered a “substantial loss of income” or “substantial out-of-pocket medical expenses” due to the COVID-19 pandemic. If these situations apply, they are protected from being evicted due to the temporary commercial eviction moratorium.

What Is A Substantial Loss Of Income Or Substantial Out-Of-Pocket Medical Expense?

The definition of a substantial loss of income is situational. However, a “substantial loss of income” could include:

• Reduced operating hours
• Full or partial closure of the place of business
• A large decrease in business income
• Needing to miss work to care for a family member with COVID-19
• Following guidance or orders from the state, local, or federal governments related to business closures

Large out-of-pocket medical expenses are self-explanatory and are any medical expenses a business owner pays for themselves or an immediate family member who contracts COVID-19.

Do Landlords Have To Notify Tenants About This Revised Ordinance?

Yes, landlords have to notify tenants about this revised ordinance. If you are a landlord, you must inform your small business tenant of their repayment rights before you initiate a repayment plan. In other words, you must notify them that, after the eviction moratorium expires, they have 6 months to repay 50% of owed past-due rent, and 12 months to repay 100% of past-due rent.

Failure to inform your tenants of their rights or demanding repayment on a different schedule could result in penalties and legal action.

Need Help Or Guidance? Laverty Chacón Is Here For You!

As experienced commercial real estate property managers serving Northern California, we’ve seen and done it all. If you need guidance as a commercial property owner during this difficult time, Laverty Chacón is here to help. Contact us to schedule a consultation with one of our experts and get the assistance you need!

*Please note that the extension of the commercial eviction moratorium may vary county by county. If you have questions regarding the commercial eviction moratorium for your Northern California county, please call us at 916-722-0333 and a member of our team will be able to assist you.

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