This post originally appeared on Burt M. Polson's Real Estate Journal and is republished with permission. Find out how to syndicate your content with theBrokerList.

Photo by  Daria Shevtsova  from  Pexels

Photo by Daria Shevtsova from Pexels

Several bills are working their way through our California state legislature, many pressured from the urgency of COVID-19. These bills represent a dramatic change in how we use real estate and update the laws that govern the landlord-tenant relationship.

Hospitality industry tenants can cancel their lease

California Senate Bill SB-939 would allow restaurants, cafes, bars, and other hospitality-type tenants affected by an expected long-term capacity reduction requirement to cancel their lease.

Hoping to create motivation to renegotiate leases, the bill also places an eviction moratorium on businesses. The tenant can unilaterally cancel the lease if a landlord and tenant cannot agree on new terms. Though the tenant would be liable for any unpaid rent, with the lease canceled, no future rent payments are required.

The proposed bill could give a lifeline to tenants whose business was hurt, but still requires landlords to make mortgage payments. The law is an all-or-nothing proposition. A tenant may only need a few months forbearance in the rent rather than to cancel the lease permanently closing the business. It is best to let the landlord and tenant come to the table with realistic expectations as they renegotiate terms.

No foreclosure or eviction from your home

Two similar proposed assembly bills AB-828 and AB-2501 temporarily prohibits a lender and landlord from enacting current law pursuing a foreclosure or eviction.

AB-828 provides for a temporary moratorium on a lender pursuing a notice of default, ultimately leading to a trustee’s sale until 15 days after a state of emergency has subsided. AB-2501 places a moratorium on the right a landlord has to pursue an unlawful detainer action followed by an eviction.

An emergency fund would be prudent for many us to have on hand for when needs arise. It is best to communicate with your lender or landlord and work out a plan immediately when you foresee a problem. It is better to negotiate a temporary payment plan rather than take more drastic steps.

Two additional similar bills are on the table that would allow tenants ten years to repay missed rent payments directly to the state. The state would then compensate landlords in the form of rent credits. The other bill would require lenders to provide homeowners a forbearance tacking on missed payments to the end of the loan.

Several additional bills are making their way through including:

  • SB-1431 allows for landlords to renegotiate their property taxes.

  • AB-2580 allows for a streamlined conversation of hotels and motels to multi-family rental property, which may help some in the hospitality industry hit hard by the pandemic while also providing a solution to our housing crises.

  • Not directly related to the pandemic, the California Schools and Local Communities Funding Act (also known as the Schools & Communities First measure), California Ballot Initiative 19-0008 proposes to revoke Proposition 13 property tax protections for commercial and industrial properties. Our schools and communities are essential, but this initiative is not the answer.

Burt M. Polson is the CEO of, a commercial real estate brokerage company and CEO of, a private equity real estate fund. Call him at (707) 254-8000 or email [email protected] and [email protected]

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