Legislative Alerts

OPPOSE SB 939

Issue:
OPPOSE SB 939! TAKE ACTION NOW!!! OPPOSE LEGISLATIVE BILL THAT WOULD NEGATE LEASES!

SB 939 (Wiener) – 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 CALIFORNIA TO FLOAT RENT OF LESSEES FOR MORE THAN A YEAR
  • ALLOWS RESTAURANT LESSEES TO NEGATE LEASE AND WALK WITH NO RESPONSIBILITY FOR TENANT IMPROVEMENT COSTS

PROTECT SMALL BUSINESSES!  CLICK HERE FOR A SAMPLE LETTER OPPOSING SB 939!

State Senators Scott Wiener and Lena Gonzalez have amended SB939, a COVID-19 commercial rent moratorium eviction bill with new language suggested by a group called the “Bay Area Hospitality Coalition,” a San Francisco group that seems to have no members.

By withholding rent for more than a year, removing existing legal remedies and rights to lessors for an extended period of time, and giving only one party to a contract the right to walk away from a contract with no responsibilities, 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.  SB 939 is not narrowly tailored to the problem, does not balance the needs of both parties, create a substantial impairment to one party to the contract, and is not a necessary solution as existing remedies under current law exist.

This new language would bring great harm to the economy and your business:

  • Makes a standard business serving a notice to terminate tenancy a VIOLATION OF THE STATE’S UNFAIR BUSINESS PRACTICES and crates a $2,000 penalty.
  • Specifically allows the continued patchwork of local ordinances making it even more complicated for any business that has buildings in multiple jurisdictions with another state overlay.
  • 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 of past or future rent accumulated during SIP. 
  • Any third party guarantees will expire with the lease termination.
  • It creates a one-time renegotiation, as the tenant will not have the option to terminate its lease at a later date under the provisions of this bill.
  • Operable for at least 22 months from March 2020 until December 31, 2021, OR two months after the end of the declared state of emergency, WHICHEVER IS LATER.
  • Does not apply to any publicly-traded company or a company that is owned by or is affiliated with a publicly-traded company, creating even more unfair treatment of businesses.

We are disappointed that Senators Wiener and Gonzalez would attack 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.  

The Governor is also working his Economic Task Force that is being considerate, thoughtful, and collaborative in addressing the issues of this Global Pandemic. 

These are both much more reasonable and fair approach that doesn’t turn the Constitution – and your business – on its head!

HERE IS THE ACTUAL BILL TEXT:
SB 939 (Wiener) – Negates all current commercial leases to the benefit of one business over another.


PROTECT YOURSELF!  CLICK HERE FOR A SAMPLE LETTER  

CLICK HERE FOR A SAMPLE LETTER OPPOSING SB 939!