BEVERLY HILLS- Beverly Hills City Council approved an updated Urgency Ordinance on Friday, June 19 in response to the temporary moratorium on commercial tenant evictions during the public health emergency. The updated ordinance establishes terms for both Small Commercial Tenants and Large Commercial Tenants regarding the non-payment of rent and the repayment period for deferred rent.
For Small Commercial Tenants, the updated Urgency Ordinance states:
- Landlords must send a notice to any commercial tenant who has not agreed to a repayment plan for outstanding rent by July 10, 2020.
- Regular payment of rent will need to recommence on August 1, 2020 unless tenants work out a payment plan with their landlord. On this date, tenants can no longer claim under the ordinance that they cannot pay their rent due to COVID-19.
- Amnesty period for non-payment of rent ends on September 1, 2020. If all past due rent is paid by this date, no interest or late fees will accrue. If all past due rent is not paid by this date, then the landlord may charge ½ the amount of either the late fee or the interest that is provided in the lease capped at 5%. No other late fee, interest or other penalty shall be charged by the landlord during the emergency.
- All past due rent and late fees/interest must be paid by January 1, 2021. Any agreement worked out between the parties will take precedence over this ordinance and may extend the period for repayment. If parties do not meet to develop an agreement this date may be adjusted as provided in the ordinance.
- If the commercial tenant fails to contact the landlord in response to the notice or otherwise fails to meet with the landlord, then the Repayment Date shall be shortened to October 1, 2020.
- If the landlord fails to send the notice or otherwise fails to meet with the commercial tenant, then the Repayment Date shall be extended to July 1, 2021.
Large Commercial Tenants are classified under businesses that:
- Employ more than 100 employees
- Has an average annual gross receipts of more than $15 million over the previous three years
- Has business operations, other than sales conducted solely through online channels, in three or more countries, including the United States
- A business whose payment of rent is guaranteed by a business falling within the above list.
For Large Commercial Tenants, the updated Urgency Ordinance states:
- Regular payment of rent will recommence on August 1, 2020 unless tenants work out a payment plan with their landlord. On this date, tenants can no longer claim under the ordinance that they cannot pay their rent due to COVID-19.
- Amnesty period for non-payment of rent ends on August 1, 2020. If all past due rent is paid by this date, no interest or late fees will accrue. If all past due rent is not paid by this date, then the landlord may charge late fees or the interest that is provided in the lease. No other late fee, interest or other penalty shall be charged by the landlord during the emergency.
- All past due rent and late fees/interest must be paid by September 1, 2020. Any agreement worked out between the parties will take precedence over this ordinance and may extend the period for repayment.
Very large commercial tenants are exempt from the ordinance and must pay rent according to their rent schedule or agreed upon terms. This ordinance does not apply to:
- Any commercial tenant that is a publicly traded entity
- An entity that is listed on the Fortune 1000
- Any entity that employs more than 500 employees
- Any commercial tenant that is owned by another entity that is publicly traded, listed on the Fortune 1000, or combined with the commercial tenant and other subsidiaries employs more than 500 employees.
This exemption shall not apply to a franchisee or similar small business owner who is the responsible tenant on the lease unless such small business owner meets the criteria of this exemption.
For questions about the City’s eviction moratorium, please contact the City’s Rent Stabilization Division at 310-285-1031.
