Senate Bill 1410 and Assembly Bill 1436 Are Bad, Bad, Bad

ATTENTION ALL MEMBERS: GET READY TO CONTACT YOUR STATE LEGISLATORS ABOUT THESE PROPOSED NEW LAWS THAT COULD CAUSE SEVERE HARM TO RENTAL HOUSING PROVIDERS – LOOK OUT FOR OUR RED ALERT!

This year’s Legislative session has been shortened due to COVID-19. Accordingly, all legislative activity is occurring very rapidly and our regular lobbying efforts and personal interaction with our legislators has been severely curtailed. That means direct contact to your Legislator is far more important than ever before and is critical. Although numerous damaging proposed bills have been stopped, there are several that remain and if passed, will adversely affect eviction rights, rent collections and other issues. PLEASE, NOW IS THE TIME TO TAKE ACTION. The Legislature needs to hear from its constituents on Assembly Bill 1436 and many others we will soon be contacting you about. For the rest of this month, we may ask you many times to help us and contact our State Legislature on several proposed bills. Please, please, help us and LET OUR STATE LEGISLATURE HEAR FROM YOU. We will be contacting you several times throughout the duration of this shortened legislative session, which ends on August 31st (unless extended).

There are two proposed new laws that could be devasting…in fact, they could be “Bankruptcy Bills” for many of us if passed:

• Senate Bill 1410 POSTPONES PAST DUE RENT COLLECTION UNTIL 2024 AND ALLOWS TENANTS 10-YEARS TO REPAY…WITH NO INTEREST!
• Assembly Bill 1436 POSTPONES PAST DUE RENT COLLECTION FOR 15-MONTHS PAST THE DATE THE STATE OF EMERGENCY IS LIFTED, OR UNTIL MARCH 31, 2022 (WHICHEVER COMES FIRST)…AND, WITH NO INTEREST!

More on Senate Bill 1410:

• YOUR tenants will have 10-years to repay deferred, past due rent unpaid during the COVID-19 emergency start in 2024. That means, YOU will not be “made whole” until sometime in 2033!
• YOU will not receive actual cash, but YOU will be given tax credits by the State of California for the value of deferred, unpaid rent, which YOU can redeem over a 10-year period from 2024 to 2033. YOU will not be paid interest. YOU will not be fully paid for 12-13 years from now!
• SENATE BILL 1410 COERCES OWNERS INTO AGREEING TO A 10-YEAR REPAYMENT Senate Bill 1410 offers no incentives to tenants to pay rent, but it coerces owners into agreeing to tenants to remain in possession of their units with or without payment of rent, prohibits evictions for unpaid rent debt during COVI-19, and forces owners to wait until the end of 2033 before being repaid in full, but without interest.
• Tenants unaffected by the COVID-19 will surely take advantage of Senate Bill 1410. Senate Bill 1410 virtually bans evictions until well after the Emergency Declaration is lifted.
• TAX CREDITS BEING OFFERED TO LANDLORDS DO NOT PAY MORTGAGES, PROPERTY TAXES OR OTHER NECESSARY EXPENSES. YOU cannot pay mortgage, insurance, maintenance, property taxes or personal living expenses with the tax credits offered under Senate Bill 1410. The tax credits may only be used on your income tax return or be sold at what will surely be a steep discount. NO INTEREST
• TAX CREDITS WILL NEVER REPLACE THE RENT YOU ARE LOSING.
  Senate Bill 1410, like others we have seen this legislative session, imposes virtually the entire financial burden of the pandemic on the backs of property owners, mostly small owners like many of YOU. We all know our tenants, who most of you are working with to arrange repayment plans, are not responsible for this situation. But instead of developing a balanced rental assistance program benefiting owners, tenants and the economy, Senate Bill 1410 virtually forgives all requirements to repay past due rent with no recourse to your tenants. SENATE BILL 1410 IS A BANKRUPTCY BILL FOR THE RENTAL HOUSING INDUSTRY.

More on Assembly Bill 1436:

• Senate Bill 1436 GIVES TENTANTS UP TO 15-MONTHS FROM THE LIFTING OF THE COVID-19 EMERGENCY DECLARATION OR UNTIL MARCH 31, 2022 (WHICHEVER IS EARLIER) TO REPAY PAST DUE RENT WITHOUT INTEREST OR LATE FEES. YOU are being forced into giving what is an interest free loan to your tenants. Assembly Bill 1436 is merely private welfare.
• As a property owner, YOU would not be allowed to evict YOUR tenants during the 15-month period or until March 31, 2022 (whichever comes first) for nonpayment of rent. Postponing your ability to collect rent for years will both decrease the likelihood that you will ever collect all or a major portion of past due rent, and the extended payback “scheme” will significantly reduce YOUR
• Although this proposed bill requires tenants to submit a written statement that they are unable to pay their rent due to COVID-19 impacts, it DOES NOT REQUIRE ANY DOCUMENTATION BE PROVIDED AS PROOF. As a result, most tenants will claim that they cannot pay their rent due to COVID-19 impacts because they have no obligation to submit any documentation proving their claim, nor is there any recourse for making false statements.
  For decades we in the multifamily rental housing industry have been unfairly targeted by impossible regulatory burdens, and
• ASSEMBLY BILL 1436 DOUBLES DOWN ON THESE UNFAIR BUFDENS. Assembly Bill 1436 imposes significant burdens on ALL rental property owners and provides no relief in the form of financial assistance for lost revenue and resulting increased costs.
• Despite a recent addition of loan forbearance, which may be costly and harm your credit, ASSEMBLY BILL 1436 POSES SIGNIFICANT HARM to ALL rental property owners and will only exacerbate the state’s current housing crisis. ASSEMBLY BILL 1436 MIGHT JUST BE THE FINAL STRAW AND IS ALSO A BANKRUPTCY BILL FOR THE RENTAL HOUSING INDUSTRY.

The next hearing before Committee for Senate Bill 1410 (Caballero) will be on August 12th and Assembly Bill 1436 (Chiu) will be on August 18th. Please look for our “RED ALERT” asking you to contact your State Legislator. PLEASE, LET OUR ELECTED OFFICIALS HEAR FROM YOU. LOOK-OUT FOR OUR RED ALERT AND TAKE ACTION!