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[NAIOP] California Legislative Alert – OPPOSE SB 939
NAIOP members in California — Right now, there is legislation moving through the California Senate that would devastate the commercial real estate industry, upend the landlord-tenant relationship and lead to a commercial mortgage crisis throughout the state. 

SB 939 , sponsored by Senator Scott Weiner (D-San Francisco), would allow commercial tenants to pay no rent for an indeterminate amount of time. It enables ALL commercial tenants to refuse to pay rent from March 4, 2020, until three months after the California’s COVID-19 emergency order is lifted. The tenant then has an additional 12 months to make up the unpaid rent after this period of rent deferment is lifted. 
 
A property owner is still obligated to make mortgage and debt service payments despite having to forgo rental income during this indeterminate period, but is provided no relief under the legislation. The inability to seek collection for any of this unpaid rent for at least 15 months after the emergency order is lifted only augments the property owner’s critical financial situation, and could lead to foreclosure and bankruptcy.
 
The legislation allows some tenants, such as restaurants, to renegotiate any existing lease; however, if the terms are unacceptable, the tenant may immediately terminate the lease in its entirety and simply walk away. This is a clear violation of the Clause of the U.S. Constitution. Further, the state has already taken action by allowing local governments to halt commercial evictions.
  
The legislation also establishes a new legal cause of action for any tenant that feels “harassed, intimidated, or threatened” by a commercial property owner. The tenant would now be able to file a lawsuit under this cause of action for $2,000 per incident. This is in addition to the existing “unfair business practices” actions that carry a $2,500 fine per incident.
 
SB 939 provides additional rights for business tenants to the detriment and inequity of commercial real estate and their owners. It will prolong the state’s desperately needed economic recovery by replacing a short-term loss in business revenue with a long-term commercial mortgage crisis. You can read additional analysis of the bill provided by the California Business Properties Association.
 
This misguided legislation must be stopped, and NAIOP needs you to contact your state Senator TODAY to oppose SB 939.
 
We've provided a letter for you to customize and send to your state senator. You can submit is electronically, or print it on your company letterhead to email directly.
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