Culver City Municipal Code Ch. 11.34 Commercial Tenant Eviction Protections

The City Council of the City of Culver City hereby finds, determines and declares that:

A. On March 14, 2020, the City Manager, under the authority of § 3.09.020, as the Director of Emergency Services, issued a Proclamation of Local Emergency in relation to the arrival of the COVID-19 virus in the Culver City community, which was ratified by the City Council on March 18, 2020.

B. On March 16, 2020, the City Manager, under the authority of § 3.09.020, as the Director of Emergency Services, issued a Public Order enacting city measures to protect members of the public and city workers from undue risk of COVID-19 and on March 20, 2020 issued a First Supplement to Public Order. Section 2 of the March 20 Order included, among other things, the following order (“Commercial Tenant Eviction Moratorium” or “CTEM”):

"[N]o landlord shall evict a commercial tenant in the City of Culver City during this local emergency period if the tenant is able to show an inability to pay rent due to circumstances related to the COVID-19 pandemic. These circumstances include:

A. loss of income due to a COVID-19 related workplace closure;

B. child care expenditures due to school closures;

C. health care expenses related to being ill with COVID-19;

D. expenses or loss of income due to caring for a member of the tenant's household who is ill with COVID-19; or

E. reasonable expenditures that stem from government-ordered emergency measures.

Nothing in this Section 2 shall be construed to mean that the commercial tenant will not still be obligated to pay lawfully charged rent as provided below. Tenants will have up to six months following the expiration of the local emergency period to repay any back due rent. Commercial tenants may use the protections afforded in this Section 2 as an affirmative defense in an unlawful detainer action. The moratorium on evictions imposed by this subsection shall remain in effect during the pendency of the local emergency period, but will not apply in cases where eviction is necessary to address an imminent and objectively verifiable threat to the health and safety of tenant or tenant's employees, landlord or landlord's employees, or neighboring businesses or residents."

C. The Commercial Tenant Eviction Moratorium also provided the City Manager the authority to promulgate rules and implementation measures (collectively, “implementation measures”) with regard to the Commercial Tenant Eviction Moratorium, which were issued on March 27, 2020.

D. Since March 2020, various orders were issued by the State of California and the Los Angeles County Department of Public Health, as well as neighboring communities, designed to protect both residential and commercial tenants from eviction during the COVID-19 pandemic.

E. The Commercial Tenant Eviction Moratorium was updated on eight occasions: March 20, April 7, April 28, May 19 (revised May 26), August 4, September 17 and November 12, 2020; and February 25, 2021; and the related Implementation Measures were updated on April 29, May 20, May 26, May 27, August 4, September 17 and November 12, 2020; and February 25 and March 10, 2021.

F. On March 14, 2022, the City Council discussed the status of the CTEM and provided direction to the City Manager: (1) to terminate the Moratorium Period of the CTEM July 31, 2022 or the termination of the Local Emergency, whichever occurs earlier; (2) to retain the 12-month grace period for the repayment of back rent; and (3) to establish additional repayment options for tenants to select, including a 24-month or 30-month graduated payment plan for the repayment of back rent. The selected repayment plan would be superseded by any repayment plan agreed upon in writing as between a landlord and tenant. The City Council also confirmed landlords may not charge late fees or penalties on any back rent owed.

G. On April 29, 2022, the City Manager issued a public order terminating the CTEM Moratorium Period on July 31, 2022 or the termination of the Local Emergency (as determined by resolution of the City Council), whichever occurs earlier, consistent with the City Council's March 14th direction. The April 29 Public Order also established the foregoing grace period/repayment options for back rent, as further detailed in the related Implementation Measures issued by the City Manager on April 29, 2022.

H. Pursuant to the April 29 Public Order and April 29 Implementation Measures, commercial tenants were required to provide their landlord with written notice selecting either the 12-month, 24-month or 30-month grace period/repayment options as set forth in Section 8 of the April 29 Implementation Measures. If a tenant failed to provide written communication to the landlord selecting one of the grace period/repayment options on or before July 31, 2022, the tenant automatically became subject to the 12-month grace period for repayment of back rent.

I. On July 31, 2022, the CTEM Moratorium Period terminated, and landlords and tenants have been subject to the requirements of the Implementation Measures for the payment of current rent due and back rent accrued during the Moratorium Period.

J. On February 27, 2023, the City Council directed the City Manager to return to City Council with (1) a resolution terminating the COVID-19 local emergency, effective April 1, 2023; and (2) a proposed urgency ordinance establishing commercial tenant eviction protections during the grace period for the repayment of rent accrued during the Moratorium Period established under COVID-19 local emergency.

K. On March 27, 2023, the City Council adopted Resolution No. 2023-R018 terminating the COVID-19 local emergency, effective April 1, 2023.

L. With the termination of the COVID-19 local emergency, the public orders establishing the Commercial Tenant Eviction Moratorium, including the Implementation Measures, will no longer be enforceable.

M. Commercial tenants have relied on eviction protection during the grace periods/repayment schedules they selected under the implementation measures, provided they are in compliance with the requirements of the implementation measures.

N. Despite the state, county and local emergencies terminating, many commercial tenants are still in an economic recovery from the significant economic impacts to their businesses since March 2020.

O. Based on the foregoing, the City Council finds it to be necessary for the immediate preservation of the public's health, safety and general welfare, to continue to protect commercial tenants from eviction during the grace periods established under the CTEM for the repayment of rent accrued during the Moratorium Period under the COVID-19 local emergency, provided tenants are in compliance with the requirements set forth therein.

(Ord. No. 2023-003 § 1)

Based on the findings set forth in § 11.34.005, the City Council hereby determines that eviction protections for commercial tenants who are in compliance with the requirements of applicable grace periods for the repayment of rent accrued during the Moratorium Period established under the COVID-19 local emergency are warranted, and hereby establishes the regulations set forth in this Chapter, which shall remain in effect through and including January 31, 2025.

(Ord. No. 2023-003 § 2)

For purposes of this Chapter, the following definitions shall apply:

AFFECTED TENANT. A commercial tenant who was unable to pay their rent during the Moratorium Period due to circumstances related to the COVID-19 pandemic and either (1) on or before July 31, 2022 provided written communication to their landlord of their selection of the grace period options described in § 11.34.030; or (2) failed to provide their landlord with written communication on or before July 31, 2022 of their selection of one of the grace period options; thereby, automatically becoming subject to the 12-month grace period described in § 11.34.030.

BACK RENT. That portion of rent owed by an affected tenant that qualified for deferral during the Moratorium Period and remained unpaid upon expiration of the Moratorium Period.

COMMERCIAL PROPERTY.

1. Real property, including any part, portion, or unit thereof, and any related facilities, space, or services, except the following:

a. Any dwelling unit as defined in Cal. Civil Code § 1940.

b. Any dwelling unit in any mobilehome park, as defined in Cal. Health and Safety Code § 18214.

c. Any recreational vehicle as defined in Cal. Civil Code § 799.24.

2. COMMERCIAL PROPERTY may include but is not limited to retail, office, industrial, manufacturing, assembly, warehousing, hotels, motels, and special uses such as gas stations, theaters, bowling alleys, health care facilities, nursing facilities, child care centers, and schools.

COMMERCIAL TENANT. Any individual, agency, association, branch, corporation, estate, group, partnership, or other entity or organization entitled by lease or by sufferance, to the use or occupancy of a commercial property, provided that such person holds a valid business license issued by the City of Culver City, unless exempt from business license requirements under the Culver City Municipal Code. Effective June 1, 2020, COMMERCIAL TENANT shall not include a multinational company, publicly traded company, or a company that employed 200 or more employees on March 20, 2020. Effective March 1, 2021, COMMERCIAL TENANT shall not include a multi-national company, publicly traded company, or a company that, together with that company's parent, subsidiary, affiliated, and related companies, employed 200 or more employees on March 20, 2020. For the purpose of this definition, a "multinational company" and "publicly traded company" shall include that company's parent, subsidiary, affiliated, and related companies.

GRACE PERIOD. The period of time for the repayment of back rent selected by, or automatically applied to, the affected tenant on or before July 31, 2022, as described in § 11.34.030.

IMPLEMENTATION MEASURES. The Tenth Amended Rules and Implementation Measures Regarding Commercial Tenant Eviction Moratorium issued by the City Manager on April 29, 2022.

LANDLORD. An owner, lessor, or sublessor who receives or is entitled to receive rent for the use and occupancy of a commercial property and the agent, representative, or successor of any of the foregoing.

LEASE. The written or oral agreement setting forth the terms and conditions of the commercial tenant's use or occupancy of the commercial property.

MORATORIUM PERIOD. March 20, 2020 through and including July 31, 2022.

NOTICE OF TERMINATION. Any notice, including notice given under Cal. Code of Civil Procedure § 1161, informing a commercial tenant of the termination of its tenancy for nonpayment of rent.

RENT. The sum of all monetary payments and all nonmonetary consideration demanded or received by a landlord from a commercial tenant for the use or occupancy of the commercial property, including the commercial tenant's access to and use of services provided by the landlord related to the use or occupancy of the commercial property. rent includes, without limitation, the fair market value of goods accepted, labor performed, or services rendered.

WRITTEN COMMUNICATION. Includes mail, email or text communications to the landlord or the landlord's representative with whom the affected tenant has previously corresponded by mail, email or text.

(Ord. No. 2023-003 § 3)

A. This Chapter applies to affected tenants of every commercial property located in the City of Culver City who accumulated back rent during the Moratorium Period and landlords of affected tenants.

B. This Chapter shall apply to every Notice of Termination, eviction notice, and unlawful detainer action for non-payment of Rent brought under Cal. Code of Civil Procedure §§ 1161 and 1161.1, seeking to recover occupancy of a commercial property occupied by an affected tenant, regardless of the date it is served or filed, if the commercial property has not been permanently vacated as of the effective date of this Chapter.

C. This Chapter shall not apply in cases where eviction is necessary to address an imminent and objectively verifiable threat to the health and safety of the affected tenant, or the affected tenant's employees, the landlord or the landlord's employees, or neighboring businesses or residents. In such cases, the landlord must give written notice to the affected tenant and to the Office of Cultural and Economic Development - Economic Development Division of the City of Culver City, describing in detail the nature of the imminent threat, the reason eviction is necessary to address the threat, and the steps taken by landlord to avoid eviction. The Economic Development Division may request additional documentation and may order suspension of the eviction process if it determines, in its reasonable discretion, that the eviction is unnecessary.

D. This Chapter does not in any way diminish, nullify or supersede provisions, including but not limited to, Force Majeure provisions, in the affected tenant's lease that entitle the affected tenant to additional protections, rights and benefits regarding the payment of rent and such provisions continue to be fully enforceable by the affected tenant according to their terms.

E. This Chapter does not in any way preclude a landlord from seeking payment, by other lawful means, of rent or back rent.

F. This Chapter does not apply to rent that became due prior to March 20, 2020 or after July 31, 2022.

(Ord. No. 2023-003 § 4)

A. No landlord shall evict an affected tenant until the applicable grace period set forth in § 11.34.030 has expired, provided the affected tenant is in compliance with § 11.34.030C.

B. A landlord may not use the eviction process to seek back rent from an affected tenant until the applicable grace period set forth in § 11.34.030 has expired, provided the affected tenant is in compliance with § 11.34.030C.

(Ord. No. 2023-003 § 5)

A. Nothing in this Chapter shall relieve an affected tenant of liability for unpaid rent or back rent.

B. A landlord may take such actions as allowed by state and local law to collect any back rent that remains unpaid, except that during the applicable grace period set forth in § 11.34.030C., below, a landlord shall not seek recovery of possession of the commercial property for the nonpayment of back rent from an affected tenant, provided the affected tenant is in compliance with § 11.34.030C. below.

C. In order to qualify for the protections of the Commercial Tenant Eviction Moratorium during the applicable grace period, an affected tenant must have, by July 31, 2022, selected and must be in compliance with the requirements of the applicable grace period set forth in § 11.34.030C.1. through C.3., unless a different agreement for repayment of back rent was reached between a landlord and affected tenant, as set forth in § 11.34.030C.4.

1. Twelve-month grace period: Under this 12-month grace period, the affected tenant must repay back rent in full no later than July 31, 2023.

a. No monthly minimum payments are required, and back rent must be fully paid no later than July 31, 2023.

b. A landlord may have cause to evict an affected tenant based on the unpaid back rent only after July 31, 2023.

c. After July 31, 2023, the landlord may take such actions as allowed by state and local law to seek recovery of possession of the commercial property for nonpayment of back rent still owed.

2. Twenty-four-month graduated repayment plan.

a. Under this 24-month grace period, the affected tenant must repay back rent according to the following 24-month repayment schedule (month 1 commencing August 1, 2022 and month 24 ending July 31, 2024):

(1) Months 1 through 4: 1% of back rent each month.

(2) Months 5 through 6: 2% of back rent each month.

(3) Months 9 through 12: 3% of back rent each month.

(4) Months 13 through 16: 5% of back rent each month.

(5) Months 17 through 20: 6% of back rent each month.

(6) Months 21 through 24: 8% of back rent each month.

b. The following table provides, as an example only, the 24-month repayment schedule in the case of back rent in the amount of $100,000:

24-Month Repayment Plan

3. Thirty-month graduated repayment plan.

a. Under this 30-month grace period, the affected tenant must repay back rent according to the following 30-month repayment schedule (month 1 commencing August 1, 2022 and month 30 ending January 31, 2025):

(1) Months 1 through 4: 2% of back rent each month.

(2) Months 5 through 9: 3% of back rent each month.

(3) Months 10 through 16: 4% of back rent each month.

(4) Months 17 through 20: 5% of back rent each month.

(5) Months 21 through 22: 4% of back rent each month.

(6) Months 23 through 27: 3% of back rent each month.

(7) Months 28 through 30: 2% of back rent each month.

b. The following table provides, as an example only, the 30-month repayment schedule in the case of back rent in the amount of $100,000:

30-Month Repayment Plan

4. Other written agreement for repayment of back rent: If, no later than July 31, 2022, a landlord and affected tenant mutually agreed, in writing, to an alternative plan for the payment of back rent ("alternate agreement"), the alternate agreement shall supersede the requirements set forth in § 11.34.030C.1. through C.3. above. By mutual agreement of a landlord and affected tenant, the alternate agreement also may waive portions of what an affected tenant owes in back rent, and may grant an affected tenant additional time to pay back rent beyond any grace periods set forth in § 11.34.030C.1. through C.3. above. An affected tenant will qualify for the protections of the Commercial Tenant Eviction Moratorium only as long as the affected tenant adheres to the repayment schedule set forth in the alternate agreement.

5. Written communication: In order for an affected tenant to receive protection from eviction during the applicable grace period, on or before July 31, 2022, an affected tenant must have selected, by written communication to the landlord, one of the grace period options, set forth in § 11.34.030C.1 through C.3, above, or entered into an alternate agreement with landlord.

6. Default to 12-month grace period: If an affected tenant failed to provide written communication to the landlord selecting one of the repayment options set forth in § 11.34.030C.1. through C.3. on or before July 31, 2022, then the affected tenant will automatically be subject to the 12-month grace period repayment provisions set forth in § 11.34.030C.1.

7. Payments due: Payments due under a grace period set forth in § 11.34.030C.2. or C.3. above must be made on or before the 1st of each month the payment is due, unless otherwise mutually agreed in writing.

8. Forfeiture of eviction protections: If at any time during the repayment plans set forth in § 11.34.030C.2. through C.4. above, an affected tenant fails to make a payment timely, then the affected tenant will forfeit any protection from eviction afforded during the applicable grace period.

9. No late fees or interest: no late fees or interest shall be charged to the affected tenant on back rent owed.

D. Without limiting a landlord's rights, as described in § 11.34.020E. or § 11.34.030B. above, an affected tenant will have the applicable grace period set forth in § 11.34.030 to pay all back rent, before being subject to eviction for nonpayment of back rent, provided any payment requirements under the applicable grace period are satisfied.

E. During the applicable grace period, the landlord may collect rent as it accrues for each rental period but may not terminate the tenancy of an affected tenant for nonpayment of back rent, provided any payment requirements under the applicable grace period are satisfied. During the applicable grace period, the landlord may terminate the tenancy of an affected tenant for nonpayment of rent accruing during the applicable grace period.

F. If during the Moratorium Period the landlord exercised a legal right to draw upon the affected tenant's deposit under Cal. Civil Code § 1950.7 for payment of rent, then the affected tenant may elect to have payment of back rent during the applicable grace period allocated to the deposit to restore the amount drawn down by the landlord, in which case such amount shall be credited to the back rent owed.

G. Upon an affected tenant's failure to make payment timely, pursuant to the repayment schedules established in § 11.34.030C.2., C.3. or C.4. above, if applicable, the landlord may take such actions as allowed by state and local law to seek recovery of possession of the commercial property for the nonpayment of back rent.

(Ord. No. 2023-003 § 6)

Landlords must retain for a period of at least one year after expiration of the applicable grace period all records and documents pertaining to every Notice of Termination that is given and every unlawful detainer proceeding that is commenced or prosecuted during the Moratorium Period and must permit inspection and copying of such records and documents by the Economic Development Division or its agents. For every Notice of Termination that is given and every unlawful detainer proceeding that is commenced or prosecuted based on an affected tenant's failure to pay rent during the applicable grace period for payment of back rent, the relevant records and documents must be retained for a period of at least one year after expiration of the applicable grace period.

(Ord. No. 2023-003 § 7)

Retaliatory action against a commercial tenant for filing a complaint with the city, or exercising any other legal right, is prohibited under California law.

(Ord. No. 2023-003 § 8)

A. Affirmative defense. Each landlord that seeks to terminate a tenancy of an affected tenant must comply with the requirements of this Chapter. Non-compliance with any applicable provision of this Chapter shall constitute an affirmative defense against an unlawful detainer action under Cal. Code of Civil Procedure §§ 1161 and 1161.1, as amended. An affected tenant's failure to comply with applicable requirements and make timely payments, as set forth in this Chapter, shall not constitute an affirmative defense against an unlawful detainer action under Cal. Code of Civil Procedure §§ 1161 and 1161.1, as amended.

B. Administrative citations. The city's Enforcement Services Division is authorized to take appropriate steps to enforce this Chapter, including conducting investigations of possible violations by a landlord. The city, in its sole discretion, may choose to enforce the provisions of this Chapter through the administrative citation process set forth in Chapter 1.02 of the CCMC. Notwithstanding any provision in Chapter 1.02 to the contrary, each violation of any provision of this interim ordinance may be subject to an administrative fine of up to $1,000. Each separate day, or any portion thereof, during which any violation of such interim ordinance occurs or continues, constitutes a separate violation. the city's decision to pursue or not pursue enforcement of any kind shall not affect a tenant's rights to pursue civil remedies or assert an affirmative defense against an unlawful detainer action under Cal. Code of Civil Procedure §§ 1161 and 1161.1, as amended.

(Ord. No. 2023-003 § 9)