California Senate Committee Hears Bill Allowing Commercial Tenants to Unilaterally Defer Rent, Renegotiate, and Terminate Leases

The California Senate Appropriations Committee held a hearing June 9, 2020 on SB 939, which would, among other things, negate many commercial leases. If passed, SB 939 would establish a temporary eviction moratorium, would permit extended rent deferrals, and would provide procedures for the renegotiating and terminating of certain commercial tenancy leases for commercial tenants negatively affected by the novel coronavirus disease (COVID-19). The Senate Appropriations and Judiciary Committees prepared these analyses of SB 939.

Nareit understands that draft amendments to the bill have been circulated; to date, these amendments do not address its fundamental flaws.

The day after this hearing, Nareit joined a coalition letter requesting that the Senate Appropriations Committee send SB 939 to the suspense file. Bills with a minimum fiscal impact to the State are placed in the Senate Appropriations Committee’s suspense file. On June 15, 2020, Nareit also joined a coalition letter requesting that the Appropriations Committee hold the bill in the suspense file. Thereafter, the Appropriations Committee holds a vote-only hearing either to send the bill to the Senate floor or hold the bill in Committee. The Appropriations Committee has scheduled a vote on SB 939 for June 18, 2020.

To learn more about Nareit’s position on SB 939, click here to visit the Stop SB 939 website, sponsored by California Business Properties Association (CBPA), of which Nareit is a member. Nareit also joined a May 15, 2020 letter to members of the California Senate Judiciary Committee expressing opposition to SB 939, however, the Senate Judiciary Committee approved the bill on May 28, 2020, before it moved to the Senate Appropriations Committee.

(Contact: Dara Bernstein at dbernstein@nareit.com)

Get Nareit Developments blog posts delivered straight to your inbox.

Subscribe

The Nareit Developments section on reit.com provides updates of Nareit's activities and key events impacting the REIT and commercial real estate industry. Nareit is the worldwide representative voice for REITs and publicly traded real estate companies with an interest in U.S. real estate and capital markets. Please see our Terms of Use.