Having supported our clients through good times and bad for well over 100 years, Parker Milliken remains dedicated to keeping its clients informed of any significant changes in the national, state and local laws caused by COVID–19 and assisting our clients with the development of new and creative strategies. This update focuses on the impact that COVID-19 has had and will continue to have on commercial evictions.

As must people know from the media coverage, last week President Trump ordered the suspension of all evictions and foreclosures for all properties owned by the United States Department of Housing and Urban Development, and Governor Newsom issued an Execute Order that authorized local governments to halt evictions for renters and homeowners. Governor Newsom, however, did not place any actual moratorium on residential or commercial evictions. Instead, Governor Newsom’s Executive Order provided support to residential moratorium’s already issued by certain municipalities in the State, including Los Angeles, and has encouraged other municipalities to consider similar measures and to expand them to commercial evictions. As a result, when dealing with a commercial tenant in the wake of the crisis caused by COVID-19, the Landlord must determine whether the local government agency for the locale of the property has issued an eviction moratorium, and if such a moratorium has been issued, what does it mean.

On March 17, 2020, the City of Los Angeles extended its residential moratorium to commercial tenants in the City of Angeles “if the tenant is able to show an inability to pay rent due to circumstances related to the COVID-19 pandemic. These circumstances include loss of business income due to a COVID-19 related workplace closure, child care expenditures due to school closures, health care expenses related to being ill with COVID-19 or caring for a member of the tenant’s household who is ill with COVID-19, or reasonable expenditures that stem from government-ordered emergency measures.” This moratorium currently only lasts until March 31, 2020, but will likely be extended.

Contrary to some reports, this moratorium does not prevent a commercial landlord from taking steps to evict any commercial tenant in the City of Los Angeles. Rather, it provides a tenant with an affirmative defense to an eviction if the tenant can prove that its inability to pay rent was caused by COVID-19—which may not be difficult, especially for restaurant, bar, nightclub and certain retail tenants.

The more effective—but less discussed—moratorium on evictions is the current court closures. For instance, yesterday, California Chief Justice Tani G. Cantil-Sakauye suspended and continued all civil and criminal jury trials for a minimum of 60 days. Last week, the Los Angeles Superior Court is closed for all matters through at least April 16, 2020 except “time-sensitive, essential matters,” and most of California’s Superior Courts have announced similar closures. Yesterday, the Los Angeles Superior Court announced that access to all of its courthouses shall be restricted to “judges, commissioners, court staff and authorized persons until further notice.”

Because unlawful detainer lawsuits are not included in “time-sensitive, essential matters,” the Court closures have effectively created a moratorium on unlawful detainer trials—the last step of an eviction—in Los Angeles until sometime after April 19, 2020. Thus, while a landlord may begin the eviction process and even file an unlawful detainer lawsuit (assuming the subject court allows electronic filing), a 3-day notice to pay or quit will not carry much force and effect until the courts re-open.