SB 939: Addressing Commercial Property Evictions
Senate Bill 939, introduced by Senator Scott Wiener, is designed to assist businesses and nonprofits struggling financially as a result of government orders that have required them to shutter since mid-March because of COVID-19. If passed and signed by the Governor, the provisions would be in effect until December 31, 2021, or two months after the declared state of emergency ends, whichever is later.
The bill makes it unlawful for a person, business, or other entity to terminate a tenancy, serve notice to terminate a tenancy, use lockout or utility shutoff actions to terminate a tenancy, or otherwise evict a tenant of commercial real property, including a business or nonprofit organization, during the pendency of the state of emergency proclaimed by the Governor on March 4, 2020, related to COVID-19, unless the tenant has been found to pose a threat to the property, other tenants, or a person, business, or other entity. No late fees may be imposed for the rent that became due during the state of emergency.
For the purposes of the bill, a commercial tenant is defined as a business that operates primarily in California and meets the following:
Its primary business is a small business, or is an eating or drinking establishment, place of entertainment, or performance venue;
It has experienced a decline of 40 percent or more of monthly revenue as compared to two months either before a state or local government shelter-in place order took effect or as compared to the same month in 2019, and, if an eating or drinking establishment, place of entertainment, or performance venue, a decline of 25 percent or more in capacity due to a social or physical distancing order or safety concerns; and is subject to regulations to prevent the spread of COVID-19 that will financially impair the business when compared to the period before the shelter-in-place order took effect.
A violation of the provisions of SB 939 constitutes an unlawful business practice, an act of unfair competition, and would deem the eviction or attempted eviction unenforceable. The property owner could also be subject to claims of harassment, mistreatment, or retaliation against the tenant, which would be punishable by a fine of up to $2,000 per violation.
If a tenant does not pay rent during any or all months occurring during the state of emergency, the sum total of that rent shall be due 12 months after the date the state of emergency ends, unless an alternative agreement for payment is made. The nonpayment of rent due during the state of emergency cannot be grounds for an unlawful detainer.
The bill passed the Senate Judiciary Committee on a party line vote on May 22. It will next be heard in the Senate Appropriations Committee. View Update