Senate Bill SB 939 - State of California

[Scott Green]

Senate Bill SB 939 is being introduced in the California Legislature, which will seriously impact all our livelihoods. SB 939 is being heard tomorrow, Friday 5/22/20.  

In short, it allows tenants to occupy property without paying rent for over a year. It also allows tenants to cancel their lease and walk away leaving the landlord holding the bag.

• SB 939 makes it illegal to even serve notice to terminate a tenancy until a FULL YEAR AFTER the State’s COVID-19 Emergency Order expires.
• SB 939 gives one party the upper hand by making the common act of serving a notice to terminate tenancy a VIOLATION OF THE STATE’S UNFAIR BUSINESS PRACTICES and creates a $2,000 penalty.
• SB 939 enables the confusing patchwork of local ordinances on the same topic making it even more complicated for any business that has buildings in multiple jurisdictions.
• SB 939 allows restaurants, bars and entertainment venues with a decline in revenue as compared to before shelter in place and facing an ongoing reduction of capacity to engage in good faith negotiations with their landlord to modify any rent or economic requirement regardless of the term remaining on the lease.
• Under SB 939, should the tenant and landlord not be able to reach a mutually satisfactory agreement, the tenant shall have the option to terminate the lease and not be liable for more than three months rent from the start of the SIP to cover the entire rest of the lease term.
• Under SB 939, any third party guarantees will expire with the lease termination.
• SB 939 will be in effect for at least 22 months from March 2020 until December 31, 2021, OR two months after the end of the state of emergency, WHICHEVER IS LATER.
• SB 939 does not apply to any publicly-traded company or a company that is owned by or is affiliated with a publicly-traded company (franchisee), creating even more unfair treatment of businesses.