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California 2020 Legislation AB 3088

California 2020 Legislation AB 3088

During the eleventh hour of the 2020 legislative session, the State legislature approved 2 significant bills in response to the COVID-19 pandemic with the potential to have far-reaching ramifications for mortgage servicers.

Assembly Bill 3088

The first of the bills this article discusses is Assembly Bill (AB) 3088,[1] which temporarily prevents evictions due to hardships related to COVID-19.  More specifically, and effective immediately, AB 3088 prevents eviction of tenants enduring financial hardship due to COVID-19 through January 2021 and delays rental recovery by landlords until March 2021.  AB 3088 only applies to residential tenants and landlords; however, no part of this bill forgives or cancels any payment obligations of a tenant.

Key provisions of AB 3088

  • A landlord must provide a notice to its tenants informing them of their rights under AB 3088 by September 30, 2020, or concurrently with any notice demanding rent or other payment obligations under the lease.
  • Tenants will have 15 business days to respond to the landlord’s demand to pay rent by returning a declaration signed under penalty of perjury, indicating that the tenant cannot pay the amount at issue because of COVID-19 related financial distress.
  • “COVID-19-related financial distress” means any of the following: (1) loss of income caused by the COVID-19 pandemic; (2) increased out-of-pocket expenses directly related to performing essential work during the COVID-19 pandemic or directly related to the health impact of the COVID-19 pandemic; (3) responsibilities to care for children, elderly, disabled, or sick family member directly related to the COVID-19 pandemic that limit a tenant’s ability to earn income; or (4) other circumstances related to the COVID-19 pandemic that have reduced a tenant’s income or increased a tenant’s expenses.
  • Households making more than $100,000 annually or more than 130 percent of the county’s median income,
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