HomeMy WebLinkAbout2020-04-07; City Council; ; Temporary Suspension of Evictions of Commercial Tenants Located in the City of Carlsbad for Nonpayment of Rent Due to COVID-19 Related Decreases in Business IncomeMeeting Date: April 7, 2020
To: Mayor and City Council
From: Celia Brewer, City Attorney
Staff Contact: Cindie McMahon, Assistant City Attorney
cindie.mcmahon@carlsbadca.gov or 760-434-2891
Subject: Temporary Suspension of Evictions of Commercial Tenants Located in the
City of Carlsbad for Nonpayment of Rent Due to COVID-19 Related
Decreases in Business Income
Recommended Action
Adopt a resolution temporarily suspending evictions of commercial tenants located in the City
of Carlsbad for nonpayment of rent due to COVID-19 related decreases in business income.
Executive Summary
COVID-19's economic impacts have raised questions about the need for relief from commercial
evictions as well as residential evictions, foreclosures, and rent increases. On March 16, 2020,
Governor Gavin Newsom issued Executive Order N-28-20 (EO N-28-20), authorizing local
governments to provide relief from commercial and residential evictions through the end of
May.
Since then, several local governments within San Diego County and across the state have
enacted temporary eviction relief, although their approaches to providing the relief are varied.
Concerned about the speed and consistency of relief measures, members of the state
Legislature, the League of California Cities, and other interested groups, including the City of
Carlsbad, the Carlsbad Chamber of Commerce, and the Carlsbad Village Association, asked
Governor Newsom to impose a statewide eviction moratorium.
On March 27, 2020, Governor Newsom issued Executive Order N-37-20, which provides
temporary eviction relief for residential tenants. Governor Newsom previously obtained
agreements from national and state financial institutions for residential foreclosure relief, and
there are existing state laws that limit residential rent increases generally and during a state of
emergency.
Left unaddressed is statewide eviction relief for commercial tenants. The proposed resolution,
to the extent permitted by federal law, temporarily suspends evictions of commercial tenants
located in the City of Carlsbad for nonpayment of rent due to COVID-19 related decreases in
business income.
April 7, 2020 Item #13 Page 1 of 15
Discussion
In the wake of COVID-19, questions have arisen about whether reductions in household and
business income will spur residential and commercial evictions and whether the city should
temporarily suspend such evictions.
Currently, evictions are not occurring because the county courts are closed for non-emergency
matters and are expected to remain closed at least through the end of April. Once county
courts resume operations, it is unclear whether evictions will resume immediately or whether
they will be deferred to allow the courts time to address other priorities (e.g., criminal, juvenile,
and family matters).
Residential Evictions
Even without COVID-19’s impacts, existing laws limit why and when certain residential evictions
may occur. For example:
The federal Servicemembers Civil Relief Act (50 USC § 3901 et seq.) requires court
approval for evictions of a servicemember or a dependent from residential rentals
where the monthly rent is below a certain dollar amount (currently about
$3,900/month).
California Civil Code Section 798, et seq., the Mobilehome Residency Law, prohibits
termination of a mobilehome tenancy except for specified reasons and only after at
least 60 days’ notice.
California Civil Code Section 1946.2, subdivisions (a) and (c), prohibit evictions of certain
residential tenancies of 12 months or longer without just cause and, where the just
cause is curable, such as a default in the payment of rent, only after the landlord
provides an opportunity to cure.
California Penal Code Section 396, subdivision (f), prohibits a landlord, during a state of
emergency, from evicting a residential tenant and then renting the premises for more
than the landlord could have charged the evicted tenant.
The federal government, though the U.S. Department of Housing and Urban Development, has
addressed concerns about COVID-19 related residential evictions by imposing a 60-day
suspension of evictions of persons from properties secured by FHA-insured single family
mortgages. The suspension began on March 18, 2020.
In California, Governor Newsom first addressed eviction concerns on March 16, 2020, by issuing
EO N-28-20, which includes provisions authorizing local governments to impose limits on
residential or commercial evictions if:
The basis for the eviction is either nonpayment of rent or a foreclosure;
April 7, 2020 Item #13 Page 2 of 15
The nonpayment of rent or foreclosure resulted from a substantial decrease in
household or business income, or substantial out-of-pocket medical expenses; and
The decrease in income or out-of-pocket medical expenses are documented and were
caused either by the COVID-19 pandemic or government response to COVID-19.
The authorization is not intended to relieve a tenant of the obligation to pay rent or to restrict a
landlord’s ability to recover rent due. The authorization is effective through May 31, 2020,
unless extended.
EO N-28-20 prompted several local governments throughout the state to impose eviction
moratoriums. Locally, as of this writing, the County of the San Diego and the cities of Chula
Vista, Encinitas, Imperial Beach, Oceanside, San Diego, and San Marcos have taken this step and
cities of Escondido and Santee are considering whether to take this step. However, the details
of their respective actions vary.
Concerned about the speed and consistency of relief measures, members of the state
Legislature, the League of California Cities, and other interested groups, including the City of
Carlsbad, the Carlsbad Chamber of Commerce, and the Carlsbad Village Association, asked
Governor Newsom to impose a statewide eviction moratorium. On March 27, 2020, Governor
Newsom issued Executive Order N-37-20 (EO N-37-20), which provides temporary eviction
relief for residential tenants statewide through the end of May.
Residential Foreclosure Limits
Governor Newsom has not issued an Executive Order authorizing local governments to enact
emergency foreclosure relief. However, EO N-28-20 requested financial institutions to
implement such relief. Since issuing EO N-28-20, Governor Newsom announced an agreement
with Citigroup, JPMorgan Chase, U.S. Bank, Wells Fargo and nearly 200 state-chartered banks,
credit unions, and servicers to provide the following relief for Californians impacted by COVID-
19:
A 90-day grace period for mortgage payments;
A 60-Day moratorium on initiating foreclosure sales or evictions;
A 90-day waiver of mortgage-related late fees and other fees; and
No negative credit impacts resulting from relief.
Bank of America is not part of Governor Newsom’s agreement, but it has stated publicly it will
be deferring mortgage payments on a month-to-month basis until the end of the state of
emergency.
Additionally, on March 18, 2020, the federal government, through the U.S. Department of
Housing and Urban Development, imposed a 60-day moratorium on the initiation and
completion of foreclosures on properties secured by FHA-insured single family mortgages.
April 7, 2020 Item #13 Page 3 of 15
Residential Rent Increase Limits
Governor Newsom has not issued an Executive Order authorizing local governments to enact
emergency rent increase relief. In addition, the city does not have a rent control ordinance and
past efforts to obtain voter approval for such an ordinance have been unsuccessful.
Nonetheless, California Penal Code Section 396, subdivision (e), prohibits a landlord from
raising rent more than 10% during a declared state of emergency. Recently enacted California
Civil Code Section 1947.12 also limits certain residential rent increases to no more than 10%
annually.
Commercial Evictions
Left unaddressed by Governor Newsom’s efforts as of this writing is eviction relief for
commercial tenants. The eviction relief enacted by the County of the San Diego and the cities of
Chula Vista, Oceanside, Imperial Beach and San Diego applies to both residential and
commercial tenants. The eviction relief being considered by the cities of Escondido and Santee
also applies to both residential and commercial tenants.
Local governments have enacted eviction relief by adopting either a resolution or an urgency
ordinance. Both actions take effect immediately. Adopting a resolution requires a majority
vote, or an affirmative vote of three council members. Adopting an urgency ordinance requires
a 4/5 vote, or an affirmative vote of four council members. Because the proposed commercial
tenant eviction relief is temporary and confined to the COVID-19 emergency circumstance, the
City Attorney’s Office is recommending the City Council adopt a resolution, if the City Council
decides to act on this issue.
The proposed resolution, to the extent permitted by federal law, temporarily suspends
evictions of commercial tenants located in the City of Carlsbad for nonpayment of rent due to
COVID-19 related decreases in business income. To obtain this eviction relief, a commercial
tenant must satisfy the following requirements:
• Prior to Governor Newsom’s proclamation of a state of emergency on March 4, 2020,
the commercial tenant was current on rent due to the landlord under the terms of the
commercial tenant’s rental agreement with the landlord.
• The commercial tenant notifies the landlord in writing, which includes email, before the
rent is due, or within a reasonable time afterwards not to exceed 10 business days, that
the commercial tenant needs to delay all or some payment of rent because of an
inability to pay the full amount due to reasons related to COVID-19, including, without
limitation, the following:
The commercial tenant was unable to operate or fully operate the commercial
tenant’s business because:
April 7, 2020 Item #13 Page 4 of 15
the business was not in one of the federal critical infrastructure sectors
or one of the additional critical sectors designated by the California State
Health Officer, or
the business was in a federal or state critical sector, but could not be
operated in compliance with the social distancing and related
requirements imposed by state or local public health officers, or
the business was in a federal or state critical sector, but was owner-
operated and the owner was sick with, showing symptoms of, or had
been directly exposed to COVID-19; was caring for another who was sick
with, showing symptoms of, or had been directly exposed to COVID-19;
or was caring for a minor child who did not have school or child care
supervision.
The commercial tenant experienced a substantial decrease in the tenant’s
business income resulting from COVID-19, the state of emergency, or related
government response.
• Within 10 business days of providing notice of inability to pay rent, the commercial
tenant provides the landlord with documentation or objectively verifiable information
showing the commercial tenant's inability to pay rent was due to reasons related to
COVID-19. If the commercial tenant does not provide the landlord with the
documentation or objectively verifiable information within this time period, the landlord
may pursue any enforcement action permitted under applicable law and the parties'
rental agreement.
These requirements are modeled after the requirements established by Governor Newsom for
residential eviction relief in EO N-37-20. They are also consistent with the authorization
Governor Newsom provided to local governments in EO N-28-20 and the eviction relief enacted
by other local agencies in the San Diego region.
The resolution does not allow a commercial tenant who is able to pay all or some of the rent
due to delay paying that rent amount. The resolution also does not relieve a commercial
tenant of liability for unpaid rent or applicable late fees. The resolution allows the landlord to
seek unpaid rent and applicable late fees after the expiration of the local emergency
declaration and requires the tenant to pay the unpaid rent and applicable late fees within three
months of the expiration of the local emergency, unless the landlord and the commercial
tenant agree upon an alternative payment arrangement. If a commercial tenant elects to
vacate the premises while the resolution is effective, all rent due is owed at the time of the
vacancy.
The temporary suspension remains in effect until the end of May 2020, unless extended. If
state or federal authorities enact laws or issue orders or regulations providing commercial
April 7, 2020 Item #13 Page 5 of 15
tenants located in the City of Carlsbad with COVID-19 related eviction relief, those state or
federal laws, orders, or regulations will control over the resolution.
Fiscal Analysis
The City Attorney’s Office does not anticipate needing an additional budget appropriation to
fund the costs of preparing, noticing, and publicizing the resolution. The City Attorney’s Office is
unable to estimate the potential costs of enforcing the resolution as such costs would depend
on the compliance rate of those subject to it and the complexity of individual cases. Like other
city departments, the City Attorney’s Office is tracking its time spent on COVID-19 related
matters for possible later reimbursement from the Federal Emergency Management Agency or
similar sources.
Next Steps
Provide widespread notice and publicity of the resolution.
Environmental Evaluation (CEQA)
Pursuant to California Public Resources Code Section 21065, this action does not constitute a
“project” within the meaning of CEQA in that it has no potential to cause either a direct physical
change in the environment, or a reasonably foreseeable indirect physical change in the
environment, and therefore does not require environmental review.
Public Notification and Outreach
This item was noticed in accordance with the Ralph M. Brown Act requirements for special
meetings and was available for public viewing and review at least 24 hours prior to scheduled
meeting.
Exhibits
1. City Council resolution
2. Correspondence
April 7, 2020 Item #13 Page 6 of 15
RESOLUTION NO. 2020-059
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, TEMPORARILY SUSPENDING EVICTIONS OF COMMERCIAL
TENANTS LOCATED IN THE CITY OF CARLSBAD FOR NONPAYMENT OF RENT
DUE TO COVID-19 RELATED DECREASES IN BUSINESS INCOME
Exhibit 1
WHEREAS, COVID-19 is an emerging respiratory disease and older adults and persons with
severe underlying health conditions are at increased risk of more serious illness after contracting
COVID-19;
WHEREAS, in a short period of time, COVID-19 has rapidly spread throughout California,
including the County of San Diego and the City of Carlsbad; and
WHEREAS, on January 31, 2020, United States Health and Human Services Secretary Alex M.
Azar II declared a Public Health Emergency for the United States, effective January 27, 2020, to aid the
nation's health care community in responding to COVID-19; and
WHEREAS, on February 14, 2020, the San Diego County Public Health Officer determined there
was an imminent and proximate threat to the public health from the introduction of COVID-19 in San
Diego County and declared a Local Health Emergency, which the San Diego County Board of Supervisors
ratified on February 19, 2020; and
WHEREAS, on March 4, 2020, Governor Gavin Newsom proclaimed a State of Emergency to
exist in California because of the threat of COVID-19; and
WHEREAS, on March 11, 2020, the World Health Organization began characterizing COVID-19
as a pandemic; and
WHEREAS, on March 12, 2020, Governor Newsom issued Executive Order N-25-20, which
ordered all residents to heed any orders or guidance of state and public health officials, including the
imposition of social distancing measures, to control the spread of COVID-19; and
WHEREAS, on March 13, 2020, the President of United States declared a national emergency
because of COVID-19; and
WHEREAS, on March 16, 2020, the City of Carlsbad's City Manager, in his role as Director of
Emergency Services, proclaimed a State of Emergency to exist in the City of Carlsbad, which the City
Council ratified on March 17, 2020; and
WHEREAS, on March 16, 2020, Governor Newsom issued Executive Order N-28-20, authorizing
local governments to impose limits on residential or commercial evictions if: (1) the basis for the
April 7, 2020 Item #13 Page 7 of 15
eviction is either nonpayment of rent or a foreclosure; (2) the nonpayment of rent or foreclosure
resulted from a substantial decrease in household or business income, or substantial out-of-pocket
medical expenses; and (3) the decrease in income or out-of-pocket medical expenses are documented
and were caused either by the COVID-19 pandemic or government response to COVID-19; and
WHEREAS, on March 17, 2020, the County of San Diego Public Health Officer issued an amended
order limiting gatherings of a certain number, closing certain business establishments, limiting the
operations of other business establishments, and requiring social distancing, increased sanitation
standards, and the use of telecommuting; and
WHEREAS, on March 19, 2020, the State Public Health Officer ordered all individuals living in
California to stay home or at their place of residence, except as needed to maintain the continuity of
operations offederal critical infrastructure sectors or additional critical sectors designated by the State
Public Health Officer; and
WHEREAS, on March 19, 2020, Governor Newsom issued Executive Order N-33-20, ordering all
residents to immediately heed the March 19, 2020, order of the State Public Health Officer; and
WHEREAS, on March 27, 2020, Governor Newsom issued Executive Order N-37-20, extending
by 60 days the time by which a residential tenant must respond to an unlawful detainer complaint and
prohibiting the enforcement of a writ of a possession if the tenant satisfies specified criteria; and
WHEREAS, on March 27, 2020, the County Public Health Officer issued a new order, effective
March 29, 2020 and continuing until further notice, limiting gatherings of a certain number, closing
certain business establishments, limiting the operations of other business establishments, and
requiring social distancing, increased sanitation standards, and the use of telecommuting; and
WHEREAS, paragraph 9 of the County Public Health Officer's March 27, 2020 Order directs,
pursuant to Health and Safety Code Section 120175.5, subdivision (b), that all governmental entities in
the county take necessary measures within their control to ensure compliance with the order; and
WHEREAS, the effects of the COVID-19 pandemic on the global economy and supply chains are
impacting many local companies due to overseas factories operating at lesser capacity and a drastic
reduction in tourism; and
WHEREAS, as a result of the various Executive Orders and public health orders, businesses
located in the City of Carlsbad have been unable to operate or unable to fully operate, resulting in a
substantial decrease in their income; and
April 7, 2020 Item #13 Page 8 of 15
WHEREAS, loss of income from COVID-19 may inhibit businesses from fulfilling their financial
obligations; and
WHEREAS, further adverse economic impacts from COVID-19 are anticipated, leaving
commercial tenants vulnerable to eviction; and
WHEREAS, displacement of commercial tenants by eviction would worsen COVID-19's
economic impacts by causing financial instability for business owners and employees and by reducing
the available jobs for City of Carlsbad residents once the state of emergency has ended; and
WHEREAS, this resolution enacts a temporary suspension of commercial evictions intended to
promote economic stability and fairness, and to promote a stable business and job market for
employers and employees to return to once the state of emergency has ended; and
WHEREAS, it is in the public interest, and necessary to the protection of life and property, to
take steps to ensure local commercial tenants are not evicted during this state of emergency.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1. That the above recitations are true and correct.
2. That under the authorization in Governor Newsom's Executive Order N-28-20 and the
City Council's power under California Government Code Section 8634 to issue orders
necessary to protect life and property during a local emergency, and to the extent
permitted by federal law, the City Council orders evictions of commercial tenants
located in the City of Carlsbad to be suspended until the local emergency is terminated,
or the withdrawal of Governor Newsom's Executive Order N-28-20, whichever occurs
sooner, if the commercial tenant satisfies all of the following requirements:
a. Prior to Governor Newsom's proclamation of a State of Emergency on March 4,
2020, the commercial tenant was current on rent due to the landlord under the
terms of the commercial tenant's rental agreement with the landlord.
b. The commercial tenant notifies the landlord in writing, which includes email, before
the rent is due, or within a reasonable time afterwards not to exceed 10 business
days, that the commercial tenant needs to delay all or some payment of rent
because of an inability to pay the full amount due to reasons related to COVID-19,
including, without limitation, the following:
April 7, 2020 Item #13 Page 9 of 15
i. The commercial tenant was unable to operate or fully operate the
commercial tenant's business because:
1. the business was not in one of the federal critical infrastructure
sectors or one of the additional critical sectors designated by the
California State Health Officer, or
2. the business was in a federal or state critical sector, but could not be
operated in compliance with the social distancing and related
requirements imposed by state or local public health officers, or
3. the business was in a federal or state critical sector, but was owner-
operated and the owner was sick with, showing symptoms of, or had
been directly exposed to COVID-19; was caring for another who was
sick with, showing symptoms of, or had been directly exposed to
COVID-19; or was caring for a minor child who did not have school or
child care supervision.
ii. The commercial tenant experienced a substantial decrease in the tenant's
business income resulting from COVID-19, the state of emergency, or related
government response.
c. Within 10 business days of providing notice under paragraph 2(b), the commercial
tenant provides the landlord with documentation or objectively verifiable
information showing the commercial tenant's inability to pay rent was due to
reasons related to COVID-19. Documentation may include, without limitation,
financial statements, business records, physician's letter, and/or bills. If the
commercial tenant does not provide the landlord with the documentation or
objectively verifiable information within this time period, the landlord may pursue
any enforcement action permitted under applicable law and the parties' rental
agreement.
3. That nothing in this resolution shall allow a commercial tenant who is able to pay all or
some of the rent due to delay paying that rent amount.
4. That nothing in this resolution shall relieve a commercial tenant of liability for unpaid
rent or applicable late fees, which the landlord may seek after the expiration of the local
April 7, 2020 Item #13 Page 10 of 15
emergency declaration and which the commercial tenant must pay within three months
of the expiration of the local emergency, unless the landlord and the commercial tenant
agree upon an alternative payment arrangement. If a commercial tenant elects to
vacate the premises while this resolution is effective, all rent due is owed at the time of
the vacancy.
5. That this resolution may be used as an affirmative defense in an unlawful detainer
proceeding commenced in violation of it.
6. That this resolution does not affect any non-eviction legal remedies available to the
landlord or the landlord's ability to enter into alternative payment arrangements with
commercial tenants.
7. That nothing in this order is intended to create, or creates, any rights or benefits,
substantive or procedural, enforceable at law or in equity, against the City of Carlsbad,
its subsidiaries, departments, officers, employees, agents, or any other person.
8. That if state or federal authorities enact laws or issue orders or regulations providing
commercial tenants located in the City of Carlsbad with COVID-19 related eviction relief,
those state or federal laws, orders, or regulations will control over this resolution and
any implementing regulations adopted by the City Manager.
9. That as soon as possible, this resolution is to be filed with the City Clerk's Office and is
to be given widespread notice and publicity.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 7th day of April, 2020, by the following vote, to wit:
AYES:
NAYS:
ABSENT:
Blackburn, Bhat-Patel, Schumacher.
Hall.
None.
MATT HALL, Mayor
April 7, 2020 Item #13 Page 11 of 15
NAIOP San Diego – Commercial Real Estate
Development Association
Building Industry Association of San Diego
April 1, 2020
TO: Mayor Matt Hall and Members of the Carlsbad City Council Via Electronic Transmission
FROM: Craig Benedetto – NAIOP San Diego
Matthew Adams – BIA San Diego
RE: Future Special Hearing - Temporary Eviction Moratorium Ordinance
On behalf of NAIOP San Diego, the commercial real estate development association,
and the Building Industry Association of San Diego, we’d like to thank the council for bringing the discussion forward. We are all in uncharted waters during this time and I know there are many questions and concerns out there. With regard to both residential and commercial real estate, our members are working with their tenants and trying to
address their issues and concerns. Although our focus is on those tenants who are
most impacted, including those in the retail, hospitality and tourism industry, we understand this situation is unprecedented in scope and reach.
Landlords do not, in ordinary circumstances, look to evict tenants. It’s expensive and
onerous. In these extraordinary circumstances, it is even more unlikely. In fact, our
members are working with their impacted tenants to provide support and relief.
Commercial real estate is a system, where property owners, tenants, service providers (like those who clean, maintain, repair and secure properties), lenders and government
all work together. So, it’s not just tenants who are impacted by this. If one part of the
system fails, the entire system falls apart. As noted, local government is an important part of that system; sometimes as a landlord and also as an entity that receives fees and taxes, including property taxes, for property owners. All of this needs to be taken into consideration when looking at actions like the one you’re considering.
This isn’t just about big businesses either, there are many members of our organizations who are small, sole proprietors or family-owned businesses who develop, own and manage commercial properties. If one or more tenants of theirs were unable to make their lease payments, it could result in them being in default of their loans in addition to their other obligations, be it service contracts, taxes, etc.
Exhibit 2
April 7, 2020 Item #13 Page 12 of 15
In short, it is incumbent on all of us to take the time to understand the legal and economic consequences of any action related to commercial and residential tenants, property owners, service vendors, etc.
In terms of them specific ordinance you are considering, should the council choose to adopt, we would recommend the following additions to bring it into conformity with the Governor’s Executive Order, as well as other jurisdictions. This will limit confusion, prevent abuse and help all parties implement the ordinance in a more effective manner.
• Include a requirement that the tenant notify their landlord of their inability to pay PRIOR to the date the rent is due - this will allow for better communication and planning to address their individual circumstances
• For the provision of documentation, the tenant should be required to provide this within one week’s time of notifying their landlord of the inability to pay - the current ordinance does not include a time frame, and this requirement will ensure that proof is provided in a timely manner
• Specific types of documentation should be required and specified in the ordinance - the County and City of San Diego have both now adopted ordinances that include this kind of language
• If a tenant decides to move out, the ordinance should specify that all rent is due at the
time of move out - this will prevent someone from owing rent and simply moving out without any requirement to pay and leaving the landlord without any recourse
• Direct people to resources that exist today, including the pending relief being offered
int he federal stimulus package, their business insurance coverage, which likely
includes business interruption coverage, as well as the federal resources through the Small Business Administration and their newly announced programs
• Work with the Insurance Commissioner on what coverage is available and what gaps exist that can be filled by both the federal and state government
• Seek additional federal and state support to bridge the gap for both the tenants and the landlords put at hardship from the corona crisis
• Provide protections not just to tenants, but also to landlords who might face hardship
from their lenders or equity partners by directing staff to work on the following
measures:
• Seek property tax relief, including a blanket waiver of late fees for at least 90 days
• Seek sewer and water bill relief
• Additional local grants or loans to assist in bridging the gap while rent may not be paid (the City of San Diego created a program yesterday repurposing some of their CDBG monies, as an example)
Thank you for your consideration of these recommendations. Please let us know if you have any comments or questions. We can be reached as follows:
April 7, 2020 Item #13 Page 13 of 15
Craig Benedetto NAIOP San Diego
Matthew Adams BIA San Diego
April 7, 2020 Item #13 Page 14 of 15
From:Council Internet Email
To:City Clerk
Subject:FW: April 7 City Council Meeting - Temporary Eviction Moratorium
Date:Thursday, April 02, 2020 8:50:04 AM
From: Audrey Jude Anguitay
Sent: Thursday, April 2, 2020 2:31 AM
To: Council Internet Email <CityCouncil@carlsbadca.gov>
Subject: April 7 City Council Meeting - Temporary Eviction Moratorium
Greetings,
I’ll start off by saying that Gov. Newsom’s latest Exec. Order, N-37-20, is a sad attempt to protect
residential owners who have been affected by COVID-19 during these hard times. And under his
previous and even lazier Exec. Order, N-28-20, local governments such as San Marcos, Oceanside,
Del Mar and San Diego have failed to pass better protective ordinances for renters— commercial or
residential alike— with some cities choosing not to pass any similar ordinances.
Other local governments, such as yourselves, are slower to adopt such ordinances but one city,
Encinitas, has done it right.
https://encinitas.granicus.com/MetaViewer.php?view_id=7&clip_id=2105&meta_id=109625
On April 1, the city of Encinitas approved their temporary eviction moratorium ordinance. They seek
to protect residential AND commercial tenants who were affected by COVID-19 by barring landlords
from charging late fees and by giving tenants 6 months from the date of the ordinance or from the
date of withdrawal of Exec. Order N-28-20 to pay back rent.
The city of Carlsbad is late in the game but you now have a chance to protect the renters of this city.
Carlsbad can do better.
Thank you,
Audrey Anguitay
CAUTION: Do not open attachments or click on links unless you recognize the
sender and know the content is safe.
April 7, 2020 Item #13 Page 15 of 15
April 7, 2020
To :
From:
Via:
Re:
Council Memorandum
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Carlsbad
All Receive -Agenda Item# .f!)
For the Information of the:
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Honorable Mayor Hall and Members of the City Council
Cindie McMahon, Assistant City Attorney
Celia A. Brewer, City Attorney
Additional Materials Related to Staff Report Item No. 13 -Temporary
Suspension of Evictions of Commercial Tenants Located in the City of
Carlsbad for Nonpayment of Rent Due to COVID-19 Related Decreases
in Business Income
This memorandum is to inform you of two temporary emergency court rules
(Attachment A), which were adopted by the Judicial Council at an emergency meeting
yesterday afternoon . These rules effectively halt all residential and commercial
unlawful detainer (eviction) and judicial foreclosure proceedings statewide until 90 days
after the COVID-19 pandemic state of emergency ends.
Emergency Rule 1 prohibits the following actions unless necessary to protect public
health and safety:
• The issuance of a summons on an unlawful detainer complaint (meaning the
complaint cannot be served)
• The entry of a default or a default judgment for restitution in an unlawful
detainer proceeding
• The setting of a trial in an unlawful detainer proceeding earlier than 60 days after
a request for trial is made
This rule also requires courts to continue any existing trial dates in unlawful detainer
proceedings for at least 60 days.
City Attorney
1200 Carlsbad Village Drive I Carlsbad, CA 92008 I 760-434-2891 I 760-434-8367 fax I www.carlsbadca.gov
Additional Materials -Staff Report Item No. 13
April 7, 2020
Page 2
Emergency Rule 2 stays all judicial foreclosure proceedings unless action is required to
further public health and safety. In addition, the rule tolls the statute of limitations for
filing judicial foreclosure proceedings and extends the time limit for exercising any rights
in judicial foreclosure proceedings, including the right of redemption from a foreclosure
sale.
Attachment: A.
Very truly yours
/s/ Cindie K. McMahon
Cindie K. McMahon
ASSISTANT CITY ATTORNEY
Judicial Council Emergency Rules 1 and 2
cc: Scott Chadwick, City Manager
Geoff Patnoe, Assistant City Manager
Celia Brewer, City Attorney
ATTACHMENT A
Emergency Rules 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, and 11 of the California Rules of Court are
adopted effective April 6, 2020, to read:
2 Emergency rule 1. Unlawful detainers
3
4 il!l Application
5
6 Notwithstanding any other law, including Code of Civil Procedure sections 1166,
7 1167, 1169, and 1170.5, this rule applies to all actions forunlawful detainer.
8
9 ill Issuance of summons
10
11 A court may not issue a summons on a complaint for unlawful detainer unless the
12 court finds, in its discretion and on the record, that the action is necessary to protect
13 public health and safety.
14
15 .(£}_ Entry of default
16
17 A court may not enter a default or a default judgment for restitution in an unlawful
18 detainer action for failure of defendant to appear unless the court finds both of the
19 following:
20
21 ill The action is necessary to protect public health and safety; and
22
23 ill The defendant has not appeared in the action within the time provided by
24 law, including by any applicable executive order.
25
26 @ Time for trial
27
28 If a defendant has appeared in the action, the court may not set a trial date earlier
29 than 60 days after a request for trial is made unless the court finds that an earlier
30 trial date is necessary to protect public health and safety. Any trial set in an
3 l unlawful detainer proceeding as of April 6, 2020 must be continued at least 60 days
32 from the initial date of trial.
33
34 .(fil Sunset of rule
35
36 This rule will remain in effect until 90 days after the Governor declares that the
3 7 state of emergency related to the COVID-19 pandemic is lifted, or until amended or
38 repealed by the Judicial Council.
39
40
41
15
Revised April 6, 2020
1 Emergency rule 2. Judicial foreclosures-suspension of actions
2
3 Notwithstanding any other law, this rule applies to any action for foreclosure on a
4 mortgage or deed of trust brought under chapter 1, title 10, of part 2 of the Code of Civil
5 Procedure, beginning at section 725a, including any action for a deficiency judgment, and
6 provides that, until 90 days after the Governor declares that the state of emergency
7 related to the COVID-19 pandemic is lifted, or until this rule is amended or repealed by
8 the Judicial Council:
9
10 ill All such actions are stayed, and the court may take no action and issue no
11 decisions or judgments unless the court finds that action is required to further the
12 public health and safety.
13
14 ill Any statute of limitations for filing such an action is tolled.
15
16 ill The period for electing or exercising any rights under that chapter, including
17 exercising any right of redemption from a foreclosure sale or petitioning the court
18 in relation to such a right, is extended.
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
. 39
40
41
42
43
16
Revised April 6, 2020
Sheila Cobian
Subject: FW: April 7 City Council Meeting -Temporary Eviction Moratorium . A O It # 1 ?,· Al Kece1ve -gen a em ~
From: Council Internet Email
Sent: Thursday, April 2, 2020 8:50 AM
To: City Clerk <Clerk@carlsbadca.gov>
Subject: FW: April 7 City Council Meeting -Temporary Eviction Moratorium
From: Audrey Jude Anguitay <
Sent: Thursday, April 2, 2020 2:31 AM
To: Council Internet Email <CityCouncil@carlsbadca.gov>
Subject: April 7 City Council Meeting -Temporary Eviction Moratorium
Greetings,
For the Info rmation of the:
JrlJ"Y COUNCIL ./'
Date ~ CA CC~
CM _L,A'CM ~t M w --
I'll start off by saying that Gov. Newsom's latest Exec. Order, N-37-20, is a sad attempt to protect residential owners who
have been affected by COVID-19 du ring these hard times. And under his previous and even lazier Exec. Order, N-28-20,
loca l governments such as San Marcos, Oceanside, Del Mar and San Diego have failed to pass better protective
ordinances for renters-commercial or residential alike-with some cities choosing not to pass any similar
ordinances.
Other local governments, such as yourselves, are slower to adopt such ordinances but one city, Encinitas, has done it
right.
https://encinitas.granicus.com/MetaViewer.php ?view id= 7&clip id=2105&meta id=109625
On April 1, the city of Encinitas approved their temporary eviction moratorium ordinance. They seek to protect
res idential AND. commercial tenants who were affected by COVID-19 by barring landlords from charging late fees and by
giving tenants 6 months from the date of the ordinance or from the date of withdrawal of Exec. Order N-28-20 to pay
back rent.
The city of Carlsbad is late in the game but you now have a chance to protect the renters of this city. Carlsbad can do
better.
Thank you,
Audrey Anguitay
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is safe.
1
Sheila Cobian
Subject: FW: RE: City Manager's Update 04-03-20
From: Socorro Anderson
Sent: Monday, April 6, 2020 11:23 AM
To: City Clerk <Clerk@carlsbadca.gov>
Subject: FW: RE: City Manager's Update 04-03-20
I am forwarding my letter to City Managers response and on Council agenda #13
I ask you read my letter @ council meeting
Sincerely Socorro
From: Socorro Anderson
Sent: Monday, April 6, 2020 9:01 AM
To: Communications <Communications@CarlsbadCA.gov>
Cc: Matthew Hall <Matt.Hall@carlsbadca.gov>
Subject: RE: City Manager's Update 04-03-20
ITEM ON AGENDA #13
Dear Mayor Hall & Council Members
All Receive -Agenda Item#~
For the Information of the:
~C~TY COU!:4°L ~
Oats :! k coL CG ~
C-M ACM_ DCM (3) _ _...-
Carlsbad is know as a tourist city with "many" fine restaurants, hotels and tourist attractions, yet when surrounding
cities are adopting a moratorium on residential evictions
due to Corvid-19 job loss this city has not? According to City Managers Daily Update it is relying on citizens accessing
"City" website too print a sample letter to "landlords"'
The poor are more effectually effected by Corvid-19, those who work in our restaurants & hotels, most who earned
minimum wages. Many do not access or own a computer to go on line
a print out a copy of a "Sample Letter" for there landlord, or know how to?
The Governors order gave local jurisdictions the authority to put a monitorial on residential evictions. The temporary
suspensions for commercial tenants of evictions should be extended to
our citizens who worked at those establishments, the poor living in and around the City of Carlsbad.
Please, I ask that we follow the example of some of our surrounding cities and offer some protection to all citizens of
Carlsbad. This by enacting a "Monitorial" for residential renters in Carlsbad.
Sincerely,
Socorro Anderson
FRMH, CommunityDirector
Madison St., Carlsbad
1
Sheila Cobian
From:
Sent:
To:
Council Internet Email
Monday, April 06, 2020 1 :39 PM
City Clerk
Subject: FW: Agenda Item No. 13 Commercial Property Evictions Urgency Ordinance
All Receive -Agenda Item# I ,3
For the Information of the:
From: Larry Tucker
Sent: Monday, April 6; 2020 1:12 PM
Subject: Agenda Item No. 13 Commercial Property Evictions Urgency Ordinance
Honorable Mayor Hall and Members of the City Council,
CITY COUNCIL
Date i:[/..1.L CA 1L"cc L---
CM _0CM _ CM(3)_
I am a commercial property owner with interests in buildings in several counties in California, including a retail property
we developed in Carlsbad almost 20 years ago (La Costa Plaza, NEC El Camino Real and La Costa Avenue). In the retail
segment of the market, there is no imbalance of bargaining position in favor of a landlord due to on-line
shopping. Retail tenants who operate out of physical locations now have plenty of clout. It is very expensive to replace
a retail tenant (i.e. lack of rent while the space is vacant, leasing commissions, tenant improvement allowances for the
new tenant and free rent for the new tenant to get its business up and going). It will be the rare retail landlord who
wants to evict a tenant who was otherwise performing before we ever heard of COVID-19.
So, to be blunt about it, retail landlords do not see a need for electeds to take sides in a business matter between a
· landlord and a tenant, crafting a remedy imposed upon landlords. The Ordinance under consideration by the Council
assumes there will be a problem with evictions with no evidence that there is actually a problem. Landlords have to deal
with their lenders on the other side of the equation and a one size fits all mandate from people who are not privy to a
landlord's relationship with its tenants, lenders and vendors can cause more harm than good. These business
relationships develop over time and therefore it is best left to the parties to resolve their own issues. If there are more
than isolated eviction "abuses" that arise in the future, the Council can always revisit the issue later when it is clear
there is a problem to address.
Other jurisdictions are considering as an alternative a letter to commercial property owners strongly recommend ing
they work with their tenants. Thank you for the opportunity to comment.
Best regards,
Grant Tucker Properties, LLC
By: Larry Tucker
CAUTION: Do not open attachments or click on links unless you recognize the sender and know the content
is safe.
1
Sheila Cobian
From:
Sent:
To:
Subject:
Council Internet Email
Monday, April 06, 2020 1 :39 PM
City Clerk
FW: Please save my small business!
From: Wendy Moore
Sent: Monday, April 6, 2020 11:41 AM
To: Council Internet Email <CityCouncil@carlsbadca.gov>
Subject: Please save my small business!
Dear Councilmembers,
All Receive -Agenda Item # _0
For the Information of the:
CITY COUNCIL .
Date _yj__u_ cJ cc ~
CM ~M-CM(3)~
I am the owner of a small business in Carlsbad; a dance studio. I am a mom of two with a third child on the way. My
studio supports my family.
My studio is located in the Greyhawk Industrial park at the NE corner of Melrose and Palomar Airport Rd.
My landlord has indicated they will not grant me forbearance or any other means of skipping my monthly rent. Further, I
cannot find any recorded note against the property, and as best I can tell they do not have debt.
The utility of a dollar to me is much greater than to them.
The impact of their decision to continue to demand payment will put me out of business, plain and simple.
I implore you to follow the lead of neighboring cities and pass legislation to include two items:
1. impose a moratorium on eviction.
2. include language which prohibits late fees or payment in full after the moratorium is lifted.
The burden of this economic crisis should be borne by those who can weather it best and not put on the backs of small
businesses.
Please help me keep the business into which I have poured my heart and soul in order to support my family.
Wendy Moore
Owner/Director
Pacific Motion Dance Center
. 3146 Tiger Run Court #113
Carlsbad, CA 92010
(
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is safe.
1
Sheila Cobian
From:
Sent:
To:
Cc:
Subject:
Bret Schanzenbach <
Monday, April 06, 2020 4:50 PM
City Clerk
Council Internet Email; Matt Leonard (matt.leonard@edwardjones.com) 1 7--..
Agenda Item #13 All Receive -Agenda Item # ~
For the Information of the:
COUNCIL L-,/
To be read into the minutes of the meeting. Date CA _ CC
CM_ M~~)-
Dear Mayor Hall and Council Members, I am Bret Schanzenbach, President and CEO of the Carlsbad Chamber of
Commerce. Thank you for your leadership during these trying times. On behalf of the Board of Directors for the Carlsbad
Chamber of Commerce, we support the Resolution regarding Commercial Eviction Relief. As stated on Agenda Item #$12,
. we did a survey that showed the Coronavirus effect on our local small businesses to be quite drastic. 54% of the survey
respondents were planning or had already laid off staff. Of those that were having to lay off staff members, 50%
responded that they were laying off 90-100% of their staff members. 44% of the respondents shared that 90-100% of
their normal business income was gone. Our local businesses need the gift of time to apply for the various forms of
as_sistance that the Federal Government has created, including the SBA Disaster Relief program, as well as the Payroll
Protection Program. Anything we can do to assist in giving them both time to apply for relief, and time to negotiate with
their landlord, will be much appreciated. Many landlords are very understanding and willing to work with our small
businesses. But unfortunately some are not. We have heard several encouraging stories about landlord-tenant
relationships, but also some very disheartening stories as well. Thank you for your consideration in this matter.
Bret Schanzenbach
President & CEO
Carlsbad Chamber of Commerce
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is safe.
1
Sheila Cobian
From:
Sent:
To:
Council Internet Email
Tuesday, April 07, 2020 10:45 AM
City Clerk
Subject: FW: Agenda Item No. 13 Commercial Property Evictions Urgency Ordinance
All Receive -Agenda Item # J:2
For the Information of the:
TYCOUNCly ✓
Da cA ✓;cc _ __,.,,,,
From: Larry Tucker CM _v6c:M (3) -~-
Sent: Tuesday, April 7, 2020 10:27 AM
To: Matthew Hall <Matt.Hall@carlsbadca.gov>
Cc: Council Internet Email <CityCouncil@carlsbadca.gov>; Steve Grant <grant@gtpcenters.com>; craigb@calstrat.com;
matt@biasandiego.org
Subject: RE: Agenda Item No. 13 Commercial Property Evictions Urgency Ordinance
One other comment. The CARES Act specifically calls out rent as an appropriate use of Federal backed funding, yet the
City's urgency ordinance places no burden on a tenant to use any funding so received to pay rent. It should. I initially
overlooked this and so did Staff.
Do you really need to pass this Ordinance tonight? I highly doubt there are evictions in process for tenants who were
current as of March 4.
I hope the Council thinks long and hard about interceding in private business without clear and convincing evidence that
an action is necessary tonight. Thank you.
From: Larry Tucker
Sent: Monday, April 6, 2020 1:12 PM
To: matt.hall@carlsbadca.gov
Cc: council@carlsbadca.gov; Steve Grant
Subject: Agenda Item No. 13 Commercial Property Evictions Urgency Ordinance
Honorable Mayor Hall and Members of the City Council,
I am a commercial property owner with interests in buildings in several counties in California; including a retail property
we developed in Carlsbad almost 20 years ago (La Costa Plaza, NEC El Camino Real and La Costa Avenue). In the retail
segment of the market, there is no imbalance of bargaining position in favor of a landlord due to on-line
shopping. Retail tenants who operate out of physical locations now have plenty of clout. It is very expensive to replace
a retail tenant (i.e. lack of rent while the space is vacant, leasing commissions, tenant improvement allowances for the
new tenant and free rent for the new tenant to get its business up and going). It will be the rare retail landlord who
wants to evict a tenant who was otherwise performing before we ever heard of COVID-19.
So, to be blunt about it, retail landlords do not see a need for electeds to take sides in a business matter between a
landlord and a tenant, crafting a remedy imposed upon landlords. The Ordinance under consideration by the Council
assumes there will be a problem with evictions with no evidence that there is actually a problem. Landlords have to deal
with their lenders on the other side of the equation and a one size fits all mandate from people who are not privy to a
landlord's relationship with its tenants, lenders and vendors can cause more harm than good . These business
relationships develop over time and therefore it is best left to the parties to resolve their own issues. If there are more
than isolated eviction "abuses" that arise in the future, the Council can always revisit the issue later when it is clear
there is a problem to address.
1
Other jurisdictions are considering as an alternative a letter to commercial property owners strongly recommending
they work with their tenants. Thank you for the opportunity to comment.
Best regards,
Grant Tucker Properties, LLC
By: Larry Tucker
CAUTION: Do not open attachments or click on links unless you recognize the sender and know the content
is safe.
2
All Receive -Agenda Item# J3
For the Information of the:
tP JFJ,cou ~ t,.,-/
NAIOP San Diego -Commercial Reaf Est~~)~
Development Association
Building Industry Association of San Diego
April 6, 2020
TO:
FROM:
'
Mayor Matt Hall and Members of the Carlsbad City Council
Via Electronic Transmission
Craig Benedetto -NAIOP San Diego
Matthew Adams -BIA San Diego
RE: April 6, 2020 Public Hearing -Temporary Eviction Moratorium Ordinance
On behalf of NAIOP San Diego, the commercial real estate development association,
the Building Industry Association of San Diego and the Building Owners and Managers
Association of San Diego, we'd like to offer the following comments to augment our
earlier written correspondence.
We appreciate the concerns of tenants, and the desire to protect those most directly
impacted by this crisis. The key is to make sure that the economic situation isn't
compounded by ordinances that might have good intentions but make the situation
worse.
Please remember, this is a system, where rent is paid to cover debt, service contracts
AND taxes. Without rent, the system can fail.
Commercial property owners aren't looking to evict tenants in normal times. They are
certainly not doing so now. And, in fact, can't. Yesterday, the California Judicial
Council announced all civil actions, including unlawful detainer actions will be
suspended for 90 days following the end of the health crisis. So, taken in conjunction .
with the Governor's orders on residential, local action isn't necessary.
That said, if the Council decides to move forward, we believe the draft ordinance
contains some provisions which are potentially injurious to commercial property owners
and would respectfully request amendment.
First, the provision to notify property owners for up to 10 days after rent is due is too
long and creates a significant communication gap for property owners to make both
accommodations to the tenant, as well as address their payments to vendors, like
security and sanitation workers, as well as lenders, where loan payments are due.
The staff report notes that the Governor's announcement regarding bank loans helps
property owners. While helpful, the "deal" does not cover all banks, and, most
importantly, did NOT cover commercial loans. As a result, property owners are being
asked to shoulder the disproportionate share of the burden.
In short, we believe accommodation for the front-end notification can be made due to
the date of this hearing, and the retroactive nature of this resolution, but to make it
consistent with virtually all local ordinances adopted to date, we'd recommend that
notification be required to be made before or on the date rent is due and no later.
Second, similarly, the allowance for up to 10 days to provide proof of hardship is too
long for property owners to address their obligations for payments due to their vendors
and lenders. Most other jurisdictions are requiring 1 week. We'd recommend no more
than 1 week or 7 days to provide this information rather than 10 days, as
proposed. ·
Third, there is no reference to payment of rent due if the tenant decides to move
out. Most other jurisdictions refer to this and we'd recommend this ordinance be
amended to include language to that says all rent is due when the tenant moves
out so it is clear that move out does not remove the obligation to pay rent that
was due.
Thank you for your consideration of these recommendations.
Craig Benedetto
NAIOP San Diego
Matthew Adams
BIA San Diego
· Michael Mcsweeney
BIA San Diego
Sheila Cobian
Subject: FW: Agenda Item No. 13 ~ommercial Property Evictions Urgency Ordinance
From: Larry Tucker
Sent: Tuesday, April 7, 2020 1:06 PM
To: City Clerk <Cl erk@ carlsbadca.gov>
Cc: Steve Grant
Subject: Agenda Item No. 13 Commercial Property Evictions Urgency Ordinance
All Re ceive -Agenda Item# 1.D
For the Information of the:
COUNCIL
Date CA V e
CM_ACM ~DCM(3) ✓
The following is my Public Comment on Agenda Item No. 13, to be read at the City Council Meeting of April 7, 2020:
Honorable Mayor Hall and Members of the City Council,
My name is Larry Tucker and I am a commercial property owner in a retail project commonly known as La Costa Plaza
· located at the Northeast corner of El Camino Real and La Costa Avenue. In the retail segment of the market, there is no
imbalance of bargaining position in favor of a landlord due to on-line shopping. Retail tenants who operate out of
physical locations now have plenty of clout. It is very expensive to replace a retail tenant. When that happens, there is a
lack of rent while the space is vacant, leasing commissions, a tenant improvement allowance for the new tenant and
free rent for the new tenant to get its business built out, up and going. It will be the rare retail landlord who wants to
evict a tenant who was otherwise performing before we ever heard of COVID-19.
So, I do not see a need for the Council to take sides in a business matter between a landlord and a tenant, crafting a
remedy imposed only upon landlords. Surprisingly, the Ordinance does not even require a tenant who receives a
Federally backed loan with which to in part pay rent, to actually pay any of that money towards rent. Landlords have to
deal with their lenders on the other side of the equation and a one size fits all mandate without considering a landlord's
relationship with its tenants, lenders and vendors should not be presumed by Ordinance to be a good idea. These
business relationships develop over time and therefore it is best left to the parties to resolve their own issues. If there
are more than a few isolated eviction "abuses" that arise in the future, the Council can always revisit the issue later
when it is clear there is a problem to address.
Other jurisdictions are considering as an alternative a letter to commercial property owners strongly urging they wo rk
with their tenants. I hope you reject the Ordinance or at least continue this item and give it more thought. Thank you.
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is safe.
1
Sheila Cobian
Subject: FW: My questions to be asked at tonight's meeting -April 7, 2020 \ ~
All Receive -Agenda Item#....!.:.)
For the Information of the:
From: Wendy Sallin
Sent: Tuesday, April 7, 2020 3:48 PM
To: City Clerk <Clerk@carlsbadca.gov>
Subject: My questions to be asked at tonight's meeting -April 7, 2020
To be asked at tonight's (April 7, 2020) City Council meeting:
IITY COUNCIY /
"oate CA 1/ cc_
cM / ./ocM(3)~
I have already spoke to and emailed Mayor Hall with background information regarding my specific situation regarding
my rent and my attempt to establish a payment plan with the Ashcraft Investment Company, Inc., the property
manager. Mayor Hall forwarded my email to the City Manager and suggested that I submit my questions via email as
well. I hope my questions make sense without the background information. I understand that some cities have
established more specific guidelines to protect renters and I want to know if the City of Carlsbad plans to do the same.
I am a rental resident in Seaside Apartments on Acacia Avenue. I have been laid off due to COVID-19 as the company I
worked for has seized operations. I currently have no income, am applying for jobs and just received my first
unemployment check. I have always paid my rent on time and would never consider paying only partial rent at this point
if I didn't have to protect the allocation of the money that I do have as I don't know how long it will take to find
employment again.
Ashcraft Investment Company is stating that they require specific, further documentation in order for them to decide
whether my request for a payment plan for the portion of rent I could not pay for April (and possibly May) "has been
approved, approved with modifications, denied, or if we need additional information."
The are requiring:
1. Lay off notice, reduction of hours or other other letter from my employer showing loss of income (I already emailed
that to them in March).
2. Copy of my most recent bank and brokerage statements showing current balances in checking, savings and
investment accounts.
3. My application for unemployment or other government benefits
4. Payment plan that I am proposing.
Specifically, my questions are:
1. Can Ashcraft Investment Company legally require me to submit all the documentation they list (especially all my bank
statements) in order for them to make a decision on whether I qualify for a payment plan?
2. Can Ashcraft legally deny any request for a reasonable payment plan of any unpaid rent for April and May in general,
regardless of what documentation I provide? I proposed payment over 6 months starting in June, 2020 for the portion of
rent I cannot pay during April and May.
1
3. Does the Governor's executive order stating that I can begin payments starting June 2020 for any unpaid rent for April
and May nullify Ashcraft's statement that the company might not approve a payment plan that I propose depending on
whether they decide I qualify for a payment plan in general (based on bank statements, letter from employer, etc).
4. Am I protected legally at the city level from being evicted if I cannot pay my full rent for April and May?
5. Am I legally protected on the local level from having to pay any late fees if I cannot pay my full rent for April and May?
6. Am I legally protected on the local level from having to pay any late fees if I cannot pay back rent over 6 months
(starting June 2020) as I proposed to Ashcraft? I certainly hope I can pay as I proposed (or sooner!) but I want to know if
they can assess late fees.
Thank you for including these questions into tonight's meeting! I hope everyone is safe and healthy!
All the best,
Wendy Sallin
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2
Temporary Suspension of
Commercial Evictions
Cindie McMahon
Assistant City Attorney
April 7, 2020
Recommendation
•Consider adopting a resolution temporarily
suspending evictions of commercial tenants
in Carlsbad for nonpayment of rent because
of substantial decreases in business income
from the COVID-19 pandemic state of
emergency
2
Concern
•Carlsbad businesses have experienced
significant financial hardship from the
COVID-19 pandemic state of emergency
•Many commercial tenants in Carlsbad are
worried about their ability to pay rent
3
Governor’s Orders re Eviction Relief
•EO N-28-20 authorized local eviction relief for nonpayment of rent for COVID-19 related reasons
•EO N-37-20 superseded N-28-20
•Statewide eviction relief for residential tenants
•No relief for commercial tenants
4
Judicial Council Emergency Rule
•Yesterday, the Judicial Council adopted
several emergency rules
•Emergency Rule 1 effectively halts all
eviction proceedings statewide until 90 days
after the COVID-19 pandemic state of
emergency ends
5
Proposed Resolution
•Requires 3 affirmative votes of the City
Council members
•Will take effect immediately, if approved
•Modeled after and consistent with
Governor’s EOs
6
Proposed Resolution
•Temporarily suspends evictions of commercial
tenants
–in Carlsbad
–for nonpayment of rent
–because of substantial decreases in business
income from the COVID-19 pandemic state of
emergency
7
Proposed Resolution
•Commercial tenant must:
–Have been current on rent prior to the state of emergency
–Notify the landlord in writing of the inability
to pay rent because of COVID-19
–Provide documentation of the inability to
pay rent because of COVID-19
8
Proposed Resolution
•The resolution does not:
–allow a commercial tenant to delay
paying any rent the tenant is able to pay
–relieve a commercial tenant of liability for
unpaid rent or applicable late fees
9
Proposed Resolution
•The resolution also does not:
–limit a landlord’s non-eviction remedies
–prevent the parties from agreeing to
alternative payment arrangements
•If a tenant vacates the premises, past due
rent is owed upon the vacancy
10
Proposed Resolution
•A landlord may seek unpaid rent and late
fees after the temporary suspension ends
•The tenant must pay unpaid rent and late
fees within 3 months after the temporary
suspension ends, unless the parties agree to
an alternative payment arrangement
11
Expiration of Resolution
•The temporary suspension would remain in
effect until the end of May 2020, unless extended
•The temporary suspension would be
subordinate to state or federal eviction
relief, including the Judicial Council’s Emergency Rule 1
12
Questions?
13