The coronavirus pandemic (COVID-19) has not only impacted the physical health of humans around the world, but the health of the U.S. economy as well. Business of all sizes are seeing drastic reductions in revenue and profit, while their monthly obligations still continue to compound.
Governor Newsom also requested that financial institutions holding home or commercial mortgages, including banks, credit unions, government-sponsored enterprises, and institutional investors, implement an immediate moratorium on foreclosure and related evictions when the foreclosure or foreclosure-related evictions arises out of a substantial decrease in household of business income or substantial out-of-pocket medical expenses, which were caused by the COVID-19 pandemic, or by any local, state, or federal government response to COVID-19.
As of March 17, 2020 Los Angeles major Eric Garcetti has issued an order providing commercial tenants in Los Angeles a grace period of 90 days, to pay their rent. The order states:
” No landlord shall evict a commercial tenant in the City of Los Angeles during this local emergency period if the tenant is able to show an inability to pay rent due to circumstances related to the COVID-19 pandemic. These circumstances include loss of business income due to a COVID-19 related workplace closure, child care expenditures due to school closures, health care expenses related to being ill with COVID-19 or caring for a member of the tenant’s household who is ill with COVID-19, or reasonable expenditures that stem from government-ordered emergency measures. Nothing in this subsection shall be construed to mean that the tenant will not still be obligated to pay lawfully charged rent. Tenants will have up to three months following the expiration of the local emergency period to repay any back due rent. Tenants may use the protections afforded in this subsection as an affirmative defense in an unlawful detainer action. This subsection shall remain in effect during the pendency of the local emergency period.
This order may be extended prior to March 31, 2020. ”
Essentially, commercial tenants that cannot pay their rent on time, will have a 3 month/90 days extension, from the expiration of the local emergency, to pay their back rent.