Proposed legislation negates all current commercial leases to the benefit of one business over another.
- Legislation would use current COVID-19 emergency to upend all your leases
- Requires all lessors in CA to defer lessee rent obligations for more than a year
- Allows a certain business type to negate lease and walk with no responsibility for tenant improvement
Protect yourself and make your voice heard.
Please call the following people and send emails and letters using the provided templates – do this TODAY!
CALL THE SENATORS:
Senator Scott Wiener:
- San Francisco office: 415-557-1300
- Sacramento office: 916-651-4011
Senator Lena Gonzalez:
- Long Beach office: 562-256-7921
- Sacramento office: 916-651-4033
Call your Local California Senator: Lookup the number
SEND A LETTER AND EMAIL:
We believe that SB 939 clearly violates the Contracts Clause of the U.S. Constitution and fails the basics of the Blaisdell Test that any court will apply to this legislation. This bill allows withholding of rent for more than a year, removes existing legal remedies, and rights from, and gives one party to a contract the right to walk away from a valid lease. Additionally, SB 939 is too broad, poorly written and confusing, does not balance the needs of both parties, is not a reasonable solution, and would prolong the economic pain it purports to address.
SB 939 would bring great harm to the economy and your business:
- SB 939 Allows a certain business type to negate lease and walk with no responsibility for tenant improvement.
- SB 939 makes it illegal to even serve notice to terminate a tenancy until a FULL YEAR AFTER the State’s COVID-19 Emergency Order expires.
- SB 939 gives one party the upper hand by making the common act of serving a notice to terminate tenancy a VIOLATION OF THE STATE’S UNFAIR BUSINESS PRACTICES and creates a $2,000 penalty.
- SB 939 enables the confusing patchwork of local ordinances on the same topic making it even more complicated for any business that has buildings in multiple jurisdictions.
- SB 939 allows restaurants, bars, and entertainment venues with a decline in revenue of 40% as compared to before shelter in place, and face an ongoing reduction of capacity of 25% or more, to engage in good faith negotiations with their landlord to modify any rent or economic requirement regardless of the term remaining on the lease. Should the tenant and landlord not be able to reach a mutually satisfactory agreement, the tenant shall have the option to terminate the lease and not be liable for more than three months rent from the start of the SIP to cover the entire rest of the lease term.
- Under SB 939, any third party guarantees will expire with the lease termination.
- SB 939 will be in effect for at least 22 months from March 2020 until December 31, 2021, OR two months after the end of the state of emergency. WHICHEVER IS LATER.
- SB 939 does not apply to any publicly-traded company or a company that is owned by, or is affiliated with, a publicly-traded company (franchisee), creating even more unfair treatment of businesses.
We are disappointed that this bill allows an attack on one business to benefit another and hope we can steer this bill into a more positive direction! The STATE should provide assistance to tenants impacted by the stay-at-home orders.
THERE ARE BETTER OPTIONS
Senate pro Tem Toni Atkins has unveiled a proposal that would help BOTH landlords and tenants and we think that is a much more reasonable approach. Read the Toni Atkins Proposal
The Governor is also working with the Economic Task Force to address this issue in a considerate, thoughtful, and collaborative manner.
These are both much better approaches that don’t turn the Constitution – and your business – on its head.
Protect yourself and make your voice heard now!
Please download the template and use it to send a letter expressing opposition to this bill. Please do this today.