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, 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,