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City Gives Tenants Strapped by Coronavirus Shutdown One Year to Pay Back Rent

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By Jorge Casuso

April 30, 2020 -- Santa Monica tenants who can show they were unable to pay rent due to the economic fallout of the coronavirus crackdown will have a year to come up with the back rent.

The extra six-month grace period is part of a revised order issued Thursday by Interim City Manager Lane Dilg that extends the City's temporary eviction moratorium from May 31 to June 30.

The order gives tenants 12 months after the moratorium is lifted to pay the rent they owe before they can be evicted.

The extension also bars landlords from requiring a residential tenant to enter into a payment plan, according to the revised order.

In addition, it excludes from commercial eviction protections "multi-national companies, publicly traded companies, and companies that employ more than 500 employees," officials said.

“The extensions of the moratorium period and the time to pay the unpaid rents are intended to provide some relief to our residents and small businesses, restaurants, stores and offices," Dilg said.

The revised order comes "in light of the uncertainties we face as to when the safe-at-home orders will be lifted, and when we can all go back to work,” Dilg said.

Under the moratorium, tenants must notify their landlords in writing that they are unable to pay rent due to COVID-19 and its impacts and provide supporting documentation.

Landlords who own small rent-controlled buildings argue that while tenants are being given a reprieve, property owners still have bills, mortgages and taxes to pay ("Small Apartment Owners Ask City to 'Share Financial Burden' When Tenants Can't Pay Rent," March 19, 2020).

The landlords have asked the City to use unallocated money from its housing fund -- which has approximately $35 million in uncommitted funding -- to help tenants pay their rent.

Former City Manager Rick Cole told the landlords that the City doesn't have the resources to provide financial assistance.

Last month, few tenants invoked the moratorium, according to landlords and property managers interviewed by The Lookout in early April ("Few Tenants Fail to Pay April Rent, Landlords Fear Numbers Will Rapidly Grow," April 7, 2020).

But landlords fear that the economic fallout of the coronavirus crackdown could rapidly swell the number of tenants unable to make their rent payments.

Their fears were reinforced by a nationwide survey that found 27 percent of tenants are not confident they could continue to pay rent if shelter-in-place lasts through June ("Nearly One in Four Renters Nationwide Failed to Make Their Full April Payment, Survey Finds," April 8, 2020).

On Friday, "thousands of rent strikes" across California are being staged in an effort to increase pressure on Gov. Gavin Newsom to cancel rent and mortgage payments, organizers said.

"Tenants and their allies will demand that Newsom immediately address the worsening financial crisis facing California residents who cannot pay rent because COVID-19 destroyed their jobs and incomes," organizers said in a press release.

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