AB 3088 - are you affected?

Question

Hi everyone-

BP has been a great resource for me over the years, but this is my first post. I felt inclined to since I'm surprised by the absence of posts re: AB3088 during covid and the lack of relief for landlords.

Is anyone else just shocked at how lax this ordinance is? I would have liked to see 50% required vs. 25% and DOCUMENTATION required, not just a signed form. This is a get out of jail free card for dishonest tenants.

The only out for landlords is to sell and have the new owner move in, forcing an eviction.

There's a good Times article about how small-time investors cannot be compared apples to apples with corporations/wealthy investors - and how moratoriums are hurting small landlords which is generally bad for affordable housing (strapped landlords will be forced to sell) - but I'm not sure if linking articles is allowed here.

Matt Devincenzo · Answer

I am not and don't believe I will be based on my tenants personalities/occupation ect. That said I do think some of these discussions are a bit overblown. If you go back to the start of this in March/Apr there was a lot of doom and gloom about the coming 'rent apocalypse' which hasn't borne out. Are there bad tenants and those that will take advantage of this? Absolutely! But many tenants (IMO) don't even know this passed, and those that do, many of them are honest. Unfortunately the few bad tenants are the ones we generally hear about, not the multitude of good ones...like I myself was for my LL.

So I'm sure there will be impacts, and I'm sure there will be bad actors, but legislation like this doesn't suddenly overnight create an implosion in an entire industry. Now all that said, I do think it is a big concern that there is a sense within government in general that it is ok to just come up with legislation like this. There are ALWAYS unintended consequences to these kinds of laws/rules and the hubris of the govt to believe they can perfectly legislate so as to avoid anyone being harmed/hurt is what will ultimately be 'our' collective downfall.

Nikita Sharma · Answer

@Kyle J. oh yeah - not the information notice - but i will be serving a new 15 day, every month, so i have record of all the unpaid rent.

Per form 1179.03(c)(4)-"Your landlord may require you to submit a new declaration form for each rental payment that you donot pay that comes due between September 1, 2020, and January 31, 2021"

Btw, the last clause in AB3088 re: owner move in, aside from eviction based on grounds of other lease violations, landlords can sell to new owners who want to move in, i wonder how many would go that route. Personally, I'd consider doing a 1031 on a property like that, have a new owner move in, and acquire another asset vs. deal with trying to chase 8K of unpaid rent in small claims court. I'm sure the courts are going to a mess when they reopen in the spring.

Kyle J. · Answer

@Nikita Sharma  Sounds like you're on top of it.  Just FYI, you don't have to keep serving the tenants with the informational notice each/every month.  It obviously wouldn't hurt to do it (other than you'll be constantly reminding them they don't have to pay).  Just pointing out that you don't have to if you didn't want to.  (See the below excerpt from CAA's guidance on AB3088.)

Nikita Sharma · Answer

@Aaron K. - yes let's see. landlords are only required to serve the notice to tenants who haven't paid, so hopefully the ones who have kept paying continue that way

@Matt Devincenzo - i don't think there will be an overnight implosion but the Times article is very valid in that when small/indiv landlords are squeezed and end up selling to corporate developers, it's worse for affordable housing which is what CA keeps trying to protect...and I don't think AB3088 is a great step. My biggest issue with it is the lack of required documentation. Anyone can now just sign this form and not pay rent. And when lower income tenants have a backlog of thousands of $$s, I guarantee you that recovering that in small claims court, which is what this ordinance forces, will be fruitless for many landlords.

@Kyle J. - thanks for that! i searched AB3088 and didn't see your thread so thanks for linking. Good of you to put all the info in a thread for other landlords to access easily. the DRE website does a decent job of outlining what's required as well, though it could be much better. I've already served the notices to the non-paying tenants I have, along with notices for both Aug and Sep rent. I will be serving them a new notice every month and require a new signed doc every month as well. I do wonder, like you, how many landlords have not served the notices...I self-manage so I'm on top of these things but i'm sure most just entrust this stuff to their prop mgrs. Thanks again for the resources! The CAA one is much better than the DRE one.

Kyle J. · Answer

@Nikita Sharma  Congrats on your first post and good job raising awareness on this relatively new law.  I made one other post on this new law, but other than that - you're right - there's hasn't been a lot of discussion on it.  (Link to previous post: https://www.biggerpockets.com/forums/548/topics/871040-california-gov-newsom-signs-covid-19-tenant-relief-act-ab3088)

Perhaps there's just not a lot of California landlords being affected by it.  (Seems hard to believe though given all the posts on here from people who say their tenants aren't paying.)  Or maybe they just don't fully understand it.  I'm not sure.

For anyone who is affected by it and has a non-paying tenant, you should know about this looming deadline:

California landlords have until Wednesday, Sept. 30, to provide an informational notice to certain tenants who’ve missed rental payments during the COVID-19 pandemic.

All residents who, as of Sept. 1, 2020, have not paid one or more rental payments that came due March 1, 2020 and Aug. 31, 2020.  The notice must be provided to these residents on or before Sept. 30, 2020. This form may be served prior to or concurrently with a 15-day notice seeking payments due between March 1, 2020, and Aug. 31, 2020, served on or before Sept. 30, 2020.

More info here: https://caanet.org/ctra-informational-notice-must-be-served-by-wednesday-sept-30

Perhaps another reason there isn't more discussion on it is because people became more focused on the federal CDC eviction moratorium, which came out almost immediately afterward.  However, according to the legal folks at the California Apartment Association, the CDC order may not even apply in California.  Here's an excerpt from a lengthy FAQ document they published on AB3088:

Anyway, one thing is for sure, lots of new laws for us landlords to navigate.  The CAA website is a great resource though as they keep updating it as information becomes available on this new law (AB3088): https://caanet.org/AB3088/

Aaron K. · Answer

@Nikita Sharma not yet but it passed at the end of Aug just before rent was due so we'll see how Oct goes, I agree proof should be required and the legislature should not make citizens shoulder the responsibilities of others without compensation.

AB 3088 - are you affected?

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