In a May 15, 2020, letter to members of the California Senate Judiciary Committee, Nareit and a group of industry organizations expressed opposition to SB 939, which, among other things, would allow many commercial tenants affected by the COVID-19 crisis to defer rent obligations for more than one year, renegotiate leases with landlords, and terminate certain leases.
“While we agree with the author that COVID-19 economic impacts have been severe, we worry that the short-term solution of forcing commercial space lessors to provide rent-free space for an extended time will have even worse long-term consequences resulting in a slower recovery, “the organizations wrote. In addition, “what’s been missing, to date, in the various discussions about ensuring business solvency, are protections or solutions for property owners who are being harmed by rents not being paid. There are numerous costs borne by property owners, including service contracts, utility charges, mortgage/finance payments, as well as numerous government fees and taxes, including property taxes. When rent is not paid, these other obligations become difficult to fulfill.”
SB 939 is scheduled for a hearing before the California Senate Judiciary Committee on May 22, 2020. Nareit urges interested members to contact members of the California Senate Judiciary Committee to express their opposition to this legislation.
(Contact: Dara Bernstein at dbernstein@nareit.com).