California Rental Assistance Program
Given the unprecedented number of residential tenants who are in default for failure to pay rent given the COVID-19 pandemic, the California legislature has enacted a number of laws to address the anticipated need for relief and the resulting litigation.
One of the more significant aspects of California’s recent legislative actions to address rental relief was the establishment of the State Rental Assistance Program. (Cal. Health & Saf. Code § 50897, et seq.) Per the federal Consolidated Appropriations Act, 2021, the Department of Housing and Community Development $25,000,000,000 has been allocated to the states, local governments, and Indian tribes for residential rent relief. For California’s portion of these funds, an application system has been set up for qualified landlords and tenants to obtain relief.
A landlord who participates in the rental relief program may be reimbursed 80% of an eligible tenant’s unpaid rent and utilities which was due between April 1, 2020, and March 31, 2021. This reimbursement is provided on the condition that the landlord waives the remaining 20% unpaid rental debt during that period. (Cal. Health & Saf. Code § 50897(d).)
Should a landlord fail or refuse to participate in this rental relief program, a tenant may also be eligible for direct assistance. A tenant seeking relief would be limited to 25% of the unpaid rental debt which accumulated from April 1, 2020, to March 31, 2021. (Cal. Health & Saf. Code § 50897(e).)
The relief being provided per this program has been earmarked for three rounds.
- Round one will include those “households with a household income that is not more than 50 percent of the area median income.” ( Health & Saf. Code § 50897(b)(1).)
- Round two will include those “communities disproportionately impacted by COVID-19,” as that is determined by the Department of Housing and Community Development. ( Health & Saf. Code § 50897(b)(2).)
- Round three will include those households not included in rounds one and two and whose “household income that is not more than 80 percent of the area median income.” ( Health & Saf. Code § 50897(b)(3).)
In addition to providing these options to both landlords and tenants, the California legislature amended Cal. Code Civ. Proc. § 116.223(a) to include a reduction in damages owed by defaulted tenants to landlords for a failure on the part of the landlord to take advantage of the rental relief program.
