Blog

08
Apr

COVID-19: Commercial Rent Relief

When it comes to rent relief, options for residential tenants have been widely publicized, but many employers, facing a downturn in business, are wondering what options they have for relief.

The City of San Diego passed a temporary ban on evictions for commercial and residential tenants on March 25, 2020 which is in effect until May 31, 2020 (or potentially longer, if the City Council extends it). It applies to tenants who cannot timely pay rent due on or after March 12, 2020 due to COVID-19.  California Governor Newsom signed a similar executive order on March 27th.  The city ordinance requires tenants, commercial or residential, to do the following:

  • Provide written notice to the landlord, on or before the date rent was due, that the tenant is unable to pay rent due to financial impacts related to COVID-19
  • Financial impacts can include a substantial decrease in business income due to business closure, loss of compensable hours of work or wages, layoffs, or substantial out of pocket medical expense
  • Within one week of providing notice, provide the landlord documentation or objectively verifiable information that the tenant is unable to pay rent due to financial impacts related to COVID-19
  • Tenants afforded protection under the Ordinance have up to 6 months from the date the ordinance is effective (March 25th) or the withdrawal of Governor Newsom's order, whichever is first, to pay all unpaid rent.  This means you are still required to pay the full amount of rent owed pursuant to the terms of the lease, even if there is a temporary delay or nonpayment.

The full text of the City of San Diego ordinance is available at: https://docs.sandiego.gov/council_reso_ordinance/rao2020/O-21177.pdf

Governor Newsom’s executive order is available at: https://www.gov.ca.gov/wp-content/uploads/2020/03/3.27.20-EO-N-37-20.pdf

The full terms of the City of San Diego ordinance include enforcement provisions and detail other scenarios, including rent payments in the event a lease is terminated early.  While the ordinance is in effect through May 31, 2020, it is likely this could change, as we have seen COVID-19 create an ever-changing landscape of protections, provisions, and relief.