COVID-19 Eviction and Foreclosure Prevention Bill Clears Key Hurdle
Legislation would prevent a wave of mass evictions and foreclosures as Californians struggle to pay rent and mortgages
Sacramento, CA--Legislation by Assemblymember David Chiu (D-San Francisco) to prevent evictions and foreclosures passed the Senate Judiciary Committee today. As the economic fallout from COVID-19 leaves millions of Californians vulnerable, Assembly Bill 1436 would prevent evictions for non-payment of rent and grant struggling property owners mortgage forbearance.
“California is facing a tsunami of evictions and foreclosures if we do not act,” said Assemblymembers Chiu. “This bill is a balanced approach to ensure we avoid mass displacement and increased homelessness in California.”
AB 1436 would prevent the eviction of renters who missed rent payments during the “COVID-19 emergency period,” defined as ending 90 days after a state of emergency order is lifted or April 1, 2021, whichever occurs first. The bill then gives renters an additional 12 months from the COVID period before a landlord can seek a civil action to collect back rent owed from the COVID period, but those civil remedies would not include eviction.
The bill also helps struggling borrowers with non-federally-backed mortgages by granting them mortgage forbearance, which can be requested from the time the bill goes into effect until the end of the “COVID-19 emergency period.” Borrowers on properties with four units or less would receive up to 12 months while borrowers on properties with five or more units would receive up to six months of forbearance.
Under AB 1436, both tenants and homeowners must attest that they experienced COVID-related hardships that prevented them from making rent or mortgage payments.
The bill encourages agreements between renters and landlords so that legal action is unnecessary, and renters can pay back their landlords if they are able to resolve the situation early. After the COVID period ends, renters must keep up with their current monthly rent and can be evicted for failing to pay current rent.
Similarly, borrowers are not prohibited from making mortgage payments during the forbearance period if they choose, and they could face foreclosure if they do not resume payments once the forbearance period ends.
As COVID-19 continues to leave millions without income, renters and homeowners have been unable to keep up with rent and mortgage payments. A survey conducted by the U.S. Census Bureau between July 16-21 showed over 1.8 million borrowers in California reported “little to no confidence” in their ability to make the next month’s mortgage payment. The situation is even more dire for renters as 3.8 million renter households in California reported “little to no confidence” in their ability to pay rent in August.
Without legislative action, millions of Californians could be evicted or foreclosed on, leading to an unprecedented and catastrophic increase in homelessness.
AB 1436 is the only bill currently moving in the Legislature to bring relief to tenants, homeowners, and small landlords. The bill will now move on for a hearing in the Senate Appropriations Committee.