City and County of Los Angeles extends safeguards against commercial evictions

It hasn’t been easy for businesses in the LA metro area to rebound from the pandemic, and their hardship is clear in the numbers. Yelp reports that to date, 7,500 businesses remain closed for the time being, with another 7,500 shuttered for good.

To stop the bleeding, Governor Newsom recently signed an executive order that allows local jurisdictions to continue prohibiting evictions of commercial tenants impacted by COVID-19 until the end of March 2021. “Offering stability to commercial tenants is key to stemming the financial impacts of the pandemic and a public health issue, allowing businesses to make decisions based on worker and customer health instead of concerns about making rent, Newsom’s order stated. The previous order was set to expire on September 30.

The city and county of Los Angeles seized the opportunity to continue its emergency powers, saying it would extend eviction moratoriums, which apply to unincorporated areas within county lines, on a month-to-month basis.

What happens at the end of March? 

This is an unsettling question for many decimated merchants who do not enjoy the same protections as residential tenants. Under the COVID-19 Tenant Protection Act of 2020, with some caveats, rent debt accrued during the pandemic will be converted to consumer debt and cannot be used as a ground for eviction. Not so with commercial tenancies. Businesses are presumed to be sophisticated and savvy about the law, and can be evicted for nonpayment of rent with little questions asked once the moratorium's end.

Parting thoughts

The one parallel we can draw between residential and commercial evictions is that compromise and compassion are the order of the day. Although some developers have sued big-box retailers over unpaid rent, there are thousands of smaller businesses that want to work with their landlords - the restructuring of leases or seeking rent deferments or abatements have been commonplace.

We can only hope that these heart-to-heart conversations are productive, and MT Evictions can certainly assist in the dialogue. Better to come to a win-win agreement than to risk having a boarded-up storefront for months or years. Of course, you can rely on us to transition commercial tenants out if a mutually agreeable deal cannot be reached.