Senate Judiciary Committee Passes SB 939

Newmeyer Dillion

At a hearing on Friday, May 22, 2020, the Senate Judiciary Committee passed SB 939 (as amended on May 13, 2020) on a 5 to 1 vote, and re-referred the bill to the Committee on Appropriations. Senator Weiner (author of the bill) testified in support of the bill. Ron Lapsley, President of the California Business Roundtable, who testified in opposition to the bill, said that if the bill becomes law, his organization will pursue a court challenge based on constitutional problems in the current version of the bill. Restaurants, non-profits and tenant advocacy groups voiced their support for the bill. In opposition, property owners and business associations spoke out against SB 939. Further amendments are expected.

SB 939 would impose new obligations on landlords, and provide protections for commercial tenants who meet specified criteria. SB 939 would impose a moratorium on eviction of those qualified commercial tenants while emergency COVID-19 orders are in effect. Any eviction actions commenced after the date of the emergency COVID-19 order, but before the adoption of SB 939, would be void and unenforceable. If enacted, SB 939 would permit commercial tenants to open negotiations for new lease terms, and provide commercial tenants the ability to terminate the lease without liability if those negotiations fail.

SB 939 contains urgency language. Once it passes the legislature by a 2/3 vote, and is signed by the Governor, this legislation becomes effective immediately.

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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