California Senate Bill 939 goes beyond the COVID-19 eviction moratorium imposed in most cities and counties across the State.

As changes occur weekly if not daily amid COVID-19. Senate Bill (939) is on the table whereby Landlords would be restricted from pursuing eviction proceedings or imposing late fees for all commercial tenants during the state of emergency, and for qualifying tenants, required to negotiate rent reductions, if requested. A tenant afforded negotiation and termination rights would have to “operate primarily in California” and be a small business, an eating or drinking establishment, an entertainment or performance venue suffering from a COVID-19-related decline in revenue or capacity.

On May 13, 2020, the proposed California Senate Bill No. 939 was amended to not only prohibit landlords from evicting commercial tenants during the pendency of the COVID-19 state of emergency, but to extend protections to certain qualifying tenants permitting express rent reduction negotiation rights and lease termination rights. Unlike the eviction moratorium restrictions imposed in many counties and cities across the state, tenants are not required to show financial losses related to COVID-19; all commercial tenants are shielded from eviction. In addition, the bill gives a subset of commercial tenants express negotiation and termination rights.

Fast forward, on May 22, 2020, California’s Senate Judiciary Committee voted 5 to 1 to pass Senate Bill 939, but moved to further amend the bill and re-referred to the Appropriations Committee for fiscal impact review. Once the amended language is drafted and submitted, the earliest Appropriations Committee hearing date would be Monday, June 8, 2020. At the hearing, the Committee could vote to approve the bill (in which case, it would be sent to the Senate floor for a second reading), amend the bill or refer it to another committee. The last day for each of the Senate and the Assembly to pass bills is Monday, August 31, 2020, except bills that take effect immediately or bills in Extraordinary Session. Senate Bill 939 expressly provides that it is “it is necessary that this act take effect immediately,” thereby permitting the legislature to act on the bill outside of the August 31 deadline.

We think the fact that California Senate Bill 939 goes beyond the COVID-19 eviction moratorium imposed in most cities and counties across the State is good news for most commercial lessees. If your (small) business falls into any of the categories listed above, you could qualify we invite you to contact us or call 866-631-3470 to set up a free consultation to find out if we can help in any way.