Commercial Evictions in the Era of COVID-19
Note: This article was originally published on 6/5/2020 and was last updated on 10/15/2020.
Ordinarily, when commercial landlords are confronted with a tenant’s nonpayment of rent, the landlord’s recourse is the (relatively) swift and effective remedy of unlawful detainer (i.e., an eviction proceeding). The COVID-19 crisis has disrupted the traditional calculus. In response to the financial impacts of COVID-19, governmental bodies in California have implemented multiple layers of legal barriers to the initiation and prosecution of unlawful detainer proceedings. The net effect of these barriers is to completely block for the time being the landlord’s ability to prosecute an unlawful detainer action and thus recover possession of leased premises following a tenant’s monetary default. In this article, we briefly summarize the current COVID-19 related impediments to commercial evictions in California.
First, on April 6, 2020, early on in the COVID-19 crisis, the Judicial Council of California adopted Emergency Rule 1 which, among other things, prohibited California trial courts from issuing summons on complaints for unlawful detainer. On August 13, 2020, the Judicial Council voted to sunset Emergency Rule 1 (along with Emergency Rule No. 2, freezing judicial foreclosures) at midnight on September 1, 2020, “to provide the Governor and Legislature more time to develop policy proposals and solutions to deal with the potential impacts of evictions and foreclosures during the COVID-19 pandemic.” On the last day of the legislative session, the Legislature passed Assembly Bill 3088, known as the “Tenant, Homeowner, and Small Landlord Relief and Stabilization Act of 2020” to protect residential tenants, but this bill does not address commercial tenancies. Therefore, as of September 2, 2020, for commercial tenancies only, California trial courts are once again authorized to issue summons on all unlawful detainer actions, enter defaults and issue writs of execution when appropriate, and set trial dates on request, subject to Code of Civil Procedure section 1170.5. The ability of the courts to process an anticipated tsunami of unlawful detainer filings in accordance with the statutory deadlines is a matter of some doubt. Further (and as discussed below), in many cities and counties, emergency tenant protection ordinances that are still in force may limit or bar entirely commercial eviction proceedings based on pandemic-related nonpayment of rent.
Second, many California cities and counties have adopted moratoria on evictions within their borders. While the terms vary from jurisdiction to jurisdiction, and some moratoria apply only to residential tenancies, many also place restrictions on commercial evictions, with such protections often limited to “small businesses” and nonprofits. Jurisdictions which have enacted such moratoria include the cities of San Francisco, Oakland, Los Angeles, and San Diego, as well as Alameda, Santa Clara, and Los Angeles counties. The terms of the various ordinances vary substantially, and determining landlord and tenant rights will require careful review of both city and county ordinances, if applicable.
Third, many California state courts (which are administered at the county level) have adopted local rules staying all unlawful detainer matters, including those involving commercial tenancies. For example, the Alameda County Superior Court issued a blanket stay on evictions on March 16, 2020, and has subsequently extended the stay multiple times, most recently on August 14, 2020. Per the Court’s press release and amended local rules, the Court’s stay on execution of writs of possession has been extended to December 31, 2020, and no new unlawful detainer complaints will be accepted for filing, unless necessary to protect public health and safety, or subject to an exception stated in a local ordinance. Similar stays or restrictions on unlawful detainer actions have been put in place by several local courts, including San Mateo County Superior Court (limited through October 2, 2020) and Santa Clara County Superior Court (end date uncertain, at least through September 30, 2020). However, some courts, such as Contra Costa County Superior Court, began accepting new commercial unlawful detainer filings as of September 2, 2020.
Finally, California Code of Civil Procedure section 715.020 permits only a “levying officer” (typically the county sheriff) to evict a tenant through service of a writ of possession. Many California sheriff’s departments have adopted formal or informal policies declaring that they will not serve writs of possession during the COVID-19 emergency. Examples include the San Francisco Sheriff’s Department, San Mateo County Sheriff’s Office, and Alameda County Sheriff’s Office. Thus, even if the commercial landlord is able to prosecute an unlawful detainer and obtain a judgment for possession, as a practical matter it may at present prove impossible to have the tenant physically removed from the leased premises.
The current restrictions on evictions in California have, for the time being, significantly altered landlord and tenant rights relative to the payment of rent. However, in some jurisdictions, we are beginning to see a return to normal with respect to commercial unlawful detainer actions. Nonetheless, depending on the terms of a given lease, applicable city or county ordinances, and the particular tenant’s circumstances, there may be steps that landlords and tenants can take to enhance their legal position going forward. Our Commercial Lease Dispute & Resolution attorneys are available to help guide commercial landlords and tenants alike through these challenging times.