Client Alert

SB-939 Placed in “Suspense” Following
Senate Appropriations Committee Hearing

As discussed in our May 22, 2020 Client Alert, SB-939 is legislation pending in the State of California.  SB-939 proposes to grant certain tenants eviction protections, rent deferral rights and lease renegotiation and termination rights.

On June 9, 2020, the California Senate Appropriations Committee held a hearing on SB-939 and moved the bill to the “Suspense File.”  This means that SB-939 did not pass in the Senate Appropriations Committee and now faces a significant hurdle, which is a positive outcome for opponents of the bill, including many property owners and developers.  On June 18, 2020, a vote-only Suspense Hearing will take place, where SB-939 will either be held in committee and under submission, effectively ending the chances that SB-939 becomes law, or moved to the Senate Floor for further consideration.  If SB-939 passes by a 2/3 majority in the Senate, it would then go to the Assembly and, if passed by a 2/3 majority in the Assembly without any amendments, would go to Governor Newsom for his approval or veto.

Following our previous Client Alert, the Senate Judiciary Committee narrowed the scope of SB-939 via amendments printed on May 29, 2020.  Additionally, in his opening remarks during the Senate Appropriations Committee hearing, Senator Scott Wiener (SB-939’s author) stated that SB-939 would be further amended to, among other things:  (1) remove the controversial and potentially unconstitutional tenant termination right; (2) apply only to “small businesses”; (3) require protected tenants to pay 25% rent during any rent deferral period; and (4) shorten the duration of the eviction moratorium.  However, the text of these newly proposed amendments was not printed before the hearing and are not available as of the publication of this Client Alert.  The expectation is that the amended SB-939 will be released this week.  We will review the revised SB-939 when it is released and will continue to monitor the status of SB-939 and provide updates.

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