Commercial Eviction Moratorium FAQ
Temporary Moratorium on Small Scale Commercial Evictions
On March 27, 2020, the Fremont City Council ratified an Executive Order establishing a temporary moratorium on evictions of small-scale commercial tenants. This new Executive Order imposes regulations related to evictions from all qualifying small business commercial units where the failure to pay rent is due to income loss resulting from the declared Coronavirus (COVID-19) public health crisis.
How is a small-scale business defined?
A small-scale business is defined as a business with gross receipts of less than $8 million per calendar year.
How long will the Executive Order be in effect?
The eviction moratorium ends thirty (30) days after the expiration of declared emergency. The full terms of the Order, including repayment of unpaid rent, will remain in effect for six (6) months following the end of the declared emergency.
Does the Executive Order allow for rent forgiveness?
No. A tenant seeking protection shall pay the portion of the rent that they are able to pay when they are able to pay it. Nothing in the Order shall relieve a tenant of liability for the unpaid rent, which the landlord may seek after expiration of the local emergency.
Fifty percent (50%) of any overdue rent and expenses must be paid within ninety (90) days after the expiration of the declared local emergency; and all outstanding overdue rent and expenses accrued during the emergency must be paid within one hundred-eighty (180) days after the expiration of the declared local emergency.
Can a landlord charge late fees for unpaid rent?
A landlord shall not impose late fees or serve a 3-day notice for nonpayment of rent to an affected tenant provided the following: within ninety (90) days after the expiration of the declared local emergency, tenant has repaid fifty percent (50%) of any overdue rent and expenses; and within one hundred-eighty (180) days after the expiration of the declared local emergency, tenant has repaid all outstanding overdue rent and expenses accrued during the emergency.
What are a landlord’s responsibilities under the Order?
Landlords are prohibited from evicting their affected tenants for nonpayment of rent when the tenant demonstrates that the failure to pay rent is due to financial hardship caused by the COVID-19 crisis.
A landlord must provide the following notice in at least 12-point font to affected tenants when serving such tenants with a Notice of Termination:
“NOTICE: THE CITY OF FREMONT HAS ADOPTED A TEMPORARY MORATORUM ON EVICTIONS FOR NONPAYMENT OF RENT PAYMENTS DUE TO COVID-19. UPDATED INFORMATION MAY BE AVAILABLE FROM THE CITY’S ECONOMIC DEVELOPMENT DEPARTMENT AT firstname.lastname@example.org or 510-284-4020.”
What are a tenant’s responsibilities under the Order?
Tenants seeking protection from eviction are required to notify their landlord the reasons why they are unable to pay rent and to demonstrate a connection to COVID-19.
Tenants should provide notice with supporting documentation(s) to their landlords on or before the day rent is due of their potential inability to pay the rent because of COVID-19, but not later than three (3) calendar days after the tenant is properly served with a Notice of Termination.
What are qualifying supporting documents for tenants to provide to their landlord?
The tenant must be able to provide documentation to support their claim that they are unable to pay rent due to the COVID-19 crisis. Financial impacts of COVID-19 crisis include:
- Lost business income as a result of the commercial tenant or its employees being sick with COVID-19 or caring for a household or family member who is sick with COVID19;
- Lost business income as a result of reduction in hours or closure of operation, increase in costs and labor, delays or interruptions or any other economic impacts of COVID-19;
- Lost business income due to compliance with a recommendation from a government health authority to stay home, self-quarantine, or avoid congregating with others during the state of emergency.
Documentation must be included that shows the business has diligently sought to mitigate losses associated with COVID-19 by altering business practices (e.g., offering take-out or delivery services) and lacks sufficient cash reserves or other financial resources necessary to cover losses associated with COVID-19. Additional documentation may include, but is not limited to:
- Bank statements, balance sheets, or substantially similar documentation showing a reduction in business following the COVID-19 outbreak;
- Documentation showing payment of substantial out-of-pocket medical expenses caused by COVID-19 resulting in a substantial reduction in business revenue; and/or
Other documentation that demonstrates a substantial hardship or inability to pay rent payments when due caused by COVID-19.
Does the Order apply to tenants who are already delinquent on their rent?
No. A Tenant shall not be afforded the protections established under the Order if, as of March 16, 2020, such tenant already was in default or had two (2) or more demonstrated delinquencies in rental payments over the prior twelve (12) month period prior to March 16, 2020.
Where can I find a copy of the Executive Order?
The Executive Order can be found here and on the City of Fremont website.
Are City fees being waived/adjusted?
Late fees and interest penalties for City of Fremont business tax certificate renewal have been suspended. For details, please visit: https://www.fremont.gov/covidbizresources#Financial
Is there financial assistance for landlords and business tenants who suffer a loss of income during COVID-19?
Landlords and businesses may be able to apply for a disaster loan related to economic damage from the Coronavirus crisis through the Small Business Administration: https://www.sba.gov/funding-programs/disaster-assistance.
Where can I find other resources available for small businesses?
The City of Fremont Economic Development Department has assembled suggestions and resources for businesses. You can find information on financial assistance programs, technical assistance, and other resources here: https://www.fremont.gov/covidbizresources.
For additional questions, please contact the Economic Developing Business Hotline by email (email@example.com) or by calling 510-284-4020.