This document summarizes real estate issues during the COVID-19 pandemic. Several counties issued shelter-in-place orders allowing limited real estate activities if remote work is not possible. Mortgage relief programs and foreclosure/eviction suspensions have been implemented. New forms address transaction delays or cancellations. Rent moratoriums prohibit evictions for non-payment if tenants provide documentation of financial hardship related to COVID-19. Commercial leases should be reviewed for force majeure, cessation of services, and quiet enjoyment clauses. Long term impacts may include increased non-payment of rent/mortgages, declining property values and rental rates, and a renters' and buyers' market.

1. REAL ESTATE AND
TENANCY ISSUES
DURING COVID-19
Government Orders, New & Best
Practices and Opportunities

2. Force Majeure
Bailing out of purchase
agreements and leases

3. It’s not business as
usual for real
estate transactions
• Six Bay Area Counties issued Shelter in Place
Orders that allow limited real estate practices.
Clarification is needed on how this applies to
Realtors, investors, and landlords.
• You should Shelter in Place during the
pandemic. If you have an urgent need to
complete a real estate transaction:
• 1. Attempt to work remotely and practice all of the
guidelines from the CDC and County Health
Departments. If personal contact is essential,
practice social distancing.
• 2. The exception for service providers enabling
residential transactions only applies to residential
transactions, not commercial or industrial. Service
providers include real estate agents, escrow agents,
notaries, title companies.

4. New California
Association of
Realtor Forms
- Notice of Unforeseen Coronavirus Circumstances
– Gives notice that transaction could be extended
or cancelled due to pandemic and the reason.
- Coronavirus Addendum or Amendment – Bilateral
agreement to either extend or cancel transaction.
- Coronavirus Property Entry Advisory and
Declaration - Advises parties that coronavirus is
deadly, that real estate services are essential
services, and parties assume the risk of allowing
viewing and entry to property.
- Listing Agreement Coronavirus Addendum –
amends listing agreement to allow showings and
other sales activities.

5. Mortgage Relief
Contact your mortgage servicer
to determine if relief is
available.
Several relief programs exist
and more may come.

6. Fannie Mae &
Freddie Mac
Backed
Mortgages
- Foreclosures and evictions from Single Family
Homes are suspended until May 17, at least.
- Mortgage forbearance options for Single Family
Homeowners and some multi-family borrowers.
- Multifamily borrowers can obtain forbearance
on payments for up to 3 months if
- Proof of hardship
- Promise to suspend evictions for tenants
unable to pay rent
- Borrower must be current on loan as of
2/1/2020

7. Statewide Order on
Nonpayment of Rent
Evictions
Governor’s Executive Order N-37-20
03-27-2020

8. Effect of
Statewide
Order
• Extends deadline for filing Answer by 60 days for
eviction Complaints based on nonpayment of
rent if
1) prior to 3/27 Tenant was current on rent;
2) Tenant notifies L at least 7 days before
rent is due that rent will be delayed due to
reasons related to COVID-19; and
3) Tenant retains and provides
documentation when paying back due rent.
Sheriff will not enforce writs.
Effective thru 5/31.

9. Be nice to your
tenants.
• Communicate with tenants about rent payments
that are due and health concerns.
• Urge tenants to pay rent in full and on time.
Landlords have no obligation to inform tenants of
their rights unless a local ordinance requires it.
• If Landlord receives no rent or communication
from Tenant, send a letter offering help. But
Tenants have to ask for help.
• Enter into a rent forbearance agreement.

10. San Francisco Moratorium on
Nonpayment of Rent
Evictions - Residential
Mayoral Proclamation Declaring
a Local State of Emergency
5th Supplemental
March 23, 2020

11. No eviction for
nonpayment
of rent due
after March 13
if the Tenant
• Provides Notice to Landlord within 30 days after
rent was due.
• Notice must explain that Tenant is unable to pay
rent due to financial impacts related to COVID-19.
• “Financial impacts” means a substantial loss of
household income due to
1. Business closure
2. Loss of compensable hours of work or wages
3. Layoffs
4. Extraordinary out-of-pocket expenses
• “Related to COVID-19” means the financial
impact was due to
1. COVID-19 pandemic
2. Mayor’s Proclamation
3. Local Health Officer’s Declaration of Emergency
4. Orders related to COVID-19 from government
authorities

12. For the
Moratorium
to apply
• Within one week of providing Notice
of inability to pay rent,
• Tenant shall provide the landlord
documentation or other objectively
verifiable information that the tenant
is unable to pay rent due to financial
impacts related to COVID-19.
• If the Tenant fails to timely provide
documentation, Landlord may evict.

13. If Tenant
provides
documentation
• Tenant shall automatically receive an
additional month to pay rent after
date documentation was provided.
• If the Tenant fails to pay rent after
this additional month, landlord must
inform Tenant of breach in writing.
• Landlord and Tenant shall then
attempt to discuss the matter in good
faith to develop a payment plan.

14. But even if no
payment plan
developed
• Tenant who provided Notice shall
have up to 6 months to pay the rent
owed before the landlord may evict.
• At the end of the 6-month extension
period, if the Tenant still has not paid
all outstanding rent, the Landlord
may evict.

15. Other aspects of
Moratorium
• Not applicable to properties not
subject to the Rent Ordinance.
• Nothing in the Moratorium relieves a
Tenant of the obligation to pay rent,
nor restricts a Landlord’s ability to
recover rent through small claims
court.
• Moratorium expires on the earlier of
30 days, termination of the
Declaration of Emergency, or upon
order of the Mayor.

16. San Francisco Moratorium on
Nonpayment of Rent
Evictions - Commercial
Mayoral Proclamation Declaring
a Local State of Emergency
4th Supplemental
March 18, 2020

17. Special
Commercial Notice
Requirements
The cure period will be 1 month from
service of Notice on Tenant. Tenant
shall have 1 month to either
1. Pay the rent, or
2. Provide documentation showing
Tenant is unable to pay the rent due to
a financial impact related to COVID-19.
“Financial impact” means either:
a. substantial decrease in business
income due to illness or disruption,
b. reduced hours or consumer demand,
c. temporary closure of the business.

18. If Tenant
provides
documentation
• Cure period extended one month so
Landlord and Tenant can discuss the
matter in good faith & develop
payment plan.
• If no agreement, Tenant shall either:
1. Pay the rent at the end of month, or
2. Provide additional documentation
which will extend cure period by one
month.
• Thereafter, Tenant may obtain
additional monthly extensions to cure
by providing updated documents
each month.

19. Landlord may
evict Commercial
Tenant
• After 6 months from date the rent
was originally due.
• If tenant has not paid all rent due at
the end of an applicable cure period
and documentation was not
provided.

20. Other aspects of
Moratorium
• Nothing in Moratorium relieves Tenant
of the obligation to pay rent, nor
restricts Landlord’s ability to recover
rent through small claims court.
• Moratorium expires on the earlier of
April 18, termination of the
Declaration of Emergency, or upon
order of the Mayor.
• The cure period requirements survive
the expiration or termination of the
Mayor’s Order.

21. Commercial
Leases – Review
all Clause
• Most commercial leases are strict
about rent payments.
• Check for a cessation of services
provision.
• Check for a force majeure provision.
• Check for a covenant of quiet
enjoyment.

22. Other Bay Area
Moratoriums on
Nonpayment of Rent
Evictions
-Oakland
-Berkeley
-Alameda

23. PREDICTING THE FUTURE
More Orders and Modifications of Existing Orders
Lots of Unpaid Rent and Mortgage Payments
Some Tenants, Buyer, and Sellers will Take Advantage
Rental Rates and Property Values Will Decline
Renters and Buyers’ Market

24. San Francisco Office
625 Market Street, 4th Fl.
San Francisco, CA 94105
415.421.0100
Oakland Office
1901 Harrison Street, 14th Fl.
Oakland, CA 94612
510.625.0100
www.friedwilliams.com
© 2020 Fried & Williams LLP. All Rights Reserved.

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