Last week a bill that prohibits commercial landlords from evicting businesses and non-profits during the COVID-19 State of Emergency was held in committee.
The bill was introduced by Senators Scott Wiener (D-San Francisco) and Senator Lena Gonzalez (D-Long Beach) after SB 939 did not pass the Senate Judiciary Committee.
If passed, SB 939 would have enacted a moratorium on commercial evictions – for small businesses and nonprofits – during the COVID-19 State of Emergency. SB 939 would have also allowed tenants in the hospitality sector to renegotiate a commercial lease if they have lost over 40% of their revenue or if they will operate at 25% reduced capacity due to COVID-19-related social distancing requirements.
“Today, the Senate missed a major opportunity to throw a lifeline to small businesses and nonprofits by helping them survive the COVID-19 economic collapse. California faces the very real prospect of a mass extinction event for small businesses and nonprofits — a result that will undermine our economic recovery and inflict countless boarded up storefronts on our neighborhoods. SB 939 was a good faith effort to help them survive. The Legislature and Governor have a responsibility to take affirmative steps to help our small businesses and nonprofits. If SB 939 isn’t the answer, then we need to come up with other answers. Inaction simply isn’t tenable, given the consequences we face. We will continue to do everything in our power to step up for these economic engines.”
SB 939 would have allowed small business and commercial landlords to modify leases to recognize the new economic reality created by COVID-19. With businesses able to terminate their economically non-viable leases — rather than abandoning the lease, getting sued, and the owner being forced into bankruptcy — landlords will have greater incentive to negotiate an amicable resolution.
SB 939’s lease renegotiation provisions will not apply to publicly owned companies, or businesses owned by publicly owned entities. Instead, these amendments are designed to help small businesses and nonprofits in need of immediate relief.
According to the bill, it would have been in effect until the end of 2021, or two months after the state of emergency ends, whichever is later.
