Commercial Evictions in the Era of COVID-19 - Update August 2020

Wendel Rosen LLP

Wendel Rosen LLP

Note: This article was originally published on 6/5/2020 and was last updated on 8/17/2020.

Ordinarily, when commercial landlords are confronted with a tenant’s nonpayment of rent, the landlord’s recourse is the (relatively) swift and effective remedy of unlawful detainer (i.e., an eviction proceeding). The COVID-19 crisis has disrupted the traditional calculus. In response to the financial impacts of COVID-19, governmental bodies in California have implemented multiple layers of legal barriers to the initiation and prosecution of unlawful detainer proceedings. The net effect of these barriers is to completely block for the time being the landlord’s ability to prosecute an unlawful detainer action and thus recover possession of leased premises following a tenant’s monetary default. In this article, we briefly summarize the current COVID-19 related impediments to commercial evictions in California.

First, and most significantly, on April 6, 2020 the Judicial Council of California adopted Emergency Rule 1 which, among other things, prohibits California trial courts from issuing summons on complaints for unlawful detainer. The rule excepts eviction proceedings “necessary to protect public health and safety,” but requires a specific factual showing to establish the exception’s applicability. The practical effect of Emergency Rule 1 has been to prevent landlords from prosecuting unlawful detainers for nonpayment since it was enacted. On August 13, 2020, the Judicial Council voted to sunset Emergency Rule 1 (along with Emergency Rule No. 2, freezing judicial foreclosures) at midnight on September 1, 2020, “to provide the Governor and Legislature more time to develop policy proposals and solutions to deal with the potential impacts of evictions and foreclosures during the COVID-19 pandemic.”  Unless the Legislature enacts legislation providing otherwise, as of September 2, 2020, California trial courts will once again be authorized to issue summons on all unlawful detainer actions, enter defaults and issue writs of execution when appropriate, and set trial dates on request, subject to Code of Civil Procedure section 1170.5.  The ability of the courts to process an anticipated tsunami of unlawful detainer filings in accordance with the statutory deadlines is a matter of some doubt.  Further (and as discussed below), in many cities and counties, emergency tenant protection ordinances that are still in force may limit or bar entirely eviction proceedings based on pandemic-related nonpayment of rent.

Second, many California cities and counties have adopted moratoria on evictions within their borders.[1] While the terms vary from jurisdiction to jurisdiction, and some apply only to residential tenancies, many also place restrictions on commercial evictions, with such protections often limited to “small businesses” and nonprofits. Jurisdictions which have enacted such moratoria include the cities of San Francisco, Oakland, Los Angeles, and San Diego, as well as Alameda, Santa Clara, Los Angeles, and San Diego counties. The terms of the various ordinances vary substantially, and determining landlord and tenant rights will require careful review of both city and county ordinances, if applicable.

Third, many California state courts (which are administered at the county level) have adopted local rules staying all unlawful detainer matters, including those involving commercial tenancies. For example, the Alameda County Superior Court issued a blanket stay on evictions on March 16, 2020 and has subsequently twice extended the stay, most recently on May 28, 2020. The Court’s press release states, “In view of the eviction-related discussions currently underway at the state and local level, the Court also orders the further stay of all unlawful detainer proceedings, including evictions, through and including Sunday, June 14, 2020.” Similar stays or restrictions on unlawful detainer actions have been put in place by several local courts, including San Francisco Superior Court (through June 19, 2020); San Mateo County Superior Court (limited through June 12, 2020); and Santa Clara County Superior Court (end date uncertain).

Finally, California Code of Civil Procedure section 715.020 permits only a “levying officer” (typically the county sheriff) to evict a tenant through service of a writ of possession. Many California sheriff’s departments have adopted formal or informal policies declaring that they will not serve writs of possession during the COVID-19 emergency. Examples include the San Francisco Sheriff’s Department, San Mateo County Sheriff’s Office, and Alameda County Sheriff’s Office. Thus, even if the commercial landlord is able to prosecute an unlawful detainer and obtain a judgment for possession, as a practical matter it may at present prove impossible to have the tenant physically removed from the leased premises.

The current restrictions on evictions in California have, for the time being, significantly altered landlord and tenant rights relative to the payment of rent. Nonetheless, depending on the terms of a given lease, applicable city or county ordinances, and the particular tenant’s circumstances, there may be steps that landlords and tenants can take to enhance their legal position going forward. Our Commercial Lease Dispute & Resolution attorneys are available to help guide commercial landlords and tenants alike through these challenging times.

[1] The authority for local governments to limit commercial and residential evictions was recently extended through September 30, 2020 by the Governor’s Executive Order N-71-20.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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