SB 939 DEAD

Commercial property owners can now breathe a sigh of relief as momentum for tenant’s rights legislation SB 939 that compromised the lease provisions for rent payments and contract termination has come to grinding halt.

In an astounding turn of events, the California Senate Appropriations Committee voted to hold Senator Scott Wiener’s bill in suspense; therefore, the bill will not advance to Assembly for a vote. The Committee hearing on bill resulted in it being moved to the ‘Suspense File’ on June 9, 2020, which set the stage for the ‘Vote Only’ Suspense Hearing on June 20th, which ended when bill failed to make it out of Committee. The bill would have required a 2/3 majority in the Senate and if passed, would have gone to Assembly before reaching the Governor’s desk to be vetoed or signed into law.

Undoubtedly due to pressure from the commercial landlord industry, Senator Wiener stated he would be amending the bill to remove tenant termination rights and require protected tenants to pay 25% of their rent during any approved rent deferral period.

The bill originally intended to allow struggling commercial tenants experiencing 40% or more decline in revenue to modify the terms of their leases and give the them the right to terminate the lease 10-days subsequent to a required 30-day  period required if negotiations ended in a stalemate.  Third-party lease guarantors would no longer be responsible for future rents through the end of the lease term.

Furthermore, there would be no landlord protection for enforcement of unlawful detainer actions if business owner were considered eligible and deemed as impacted by COVID-19 during the Governor’s state of emergency. The due date for rent would be pushed back a minimum of one year after the of state of emergency was lifted.

We are sure all commercial landlords  appreciate the work of the many industry advocates whose voices were heard in the fight to stop this bill.