Commercial real estate owners have hotly contested SB 939. Introduced by Senators Scott Wiener and Lena Gonzalez, the bill imposes a moratorium on commercial evictions, extends repayment periods for unpaid rent and opens the door for tenants to renegotiate their lease term at any time. The bill passed the Senate Judiciary Committee at the end of May, but has now gone back under further review. Senator Wiener has also claimed he will amend the bill to better address the concerns of stakeholders. However, the CRE community is in stark opposition to the bill, which is viewed as a one-size-fits-all solution.

"This is a one-size-fits-all, overbroad approach, that becomes even more problematic because, as currently drafted, the end of the rent deferral period is tied to the end of the state of emergency, which has no firm end date, and those tenants have until 12 months after the state of emergency ends to make a balloon payment of the unpaid rent that accrued during the state of emergency," Jonathan Zweig of Cox, Castle & Nicholson LLP, tells GlobeSt.com. "Government Code Section 8629 provides that the Governor must terminate a state of emergency 'at the earliest possible date that conditions warrant.' Given the unprecedented nature of COVID-19, the State of Emergency could conceivably be in effect until a vaccine is widely distributed."

Not only is the solution a one-size-fits-all approach, contends Zweig, it also unfairly impacts property owners. "Instead of attempting to equitably share the economic burden caused by COVID-19, in its current form SB-939 will have a lopsided impact on commercial real property owners because, among other things, it ignores the fact that they rely on monthly revenue to meet their obligations," he says.