During the pandemic, state and county governments issued a moratorium on evictions to help businesses. But a moratorium can’t last forever and now in some California counties it’s getting close to time to pay the piper…some back rent.
For example in Santa Clara County, the eviction moratorium expires on March 31 and, when it does, businesses that haven’t paid rent are on the hook for paying all of their outstanding back rent within a year. Given that the economy is still sputtering, unemployment is still high, and the COVID-19 outbreak has worsened dramatically — potentially depressing business still further — many local business owners are worried about the moratorium’s expiration, advocates say.
“There is still great fear, and this is just the beginning,” said Dennis King, director of the Silicon Valley Small Business Development Center. “The rent is just one more of the overall financial crises that they’re facing.”
Once the moratorium expires, businesses are required to pay at least 50 percent of their past-due rent within six months. They will have another six months to pay back the rest.
Should the pandemic continue to thwart small business owners’ efforts to generate revenue, many will be in even worse financial shape when the moratorium ends.
“The on-again, off-again for nail salons, beauty salons, and restaurants has been very detrimental,” King said.
Judy Chhay, who has co-owned Manley’s Donut Shop in downtown Willow Glen with her husband for five years, is among the local business operators who have been struggling to make ends meet. Chhay has continued to pay rent, but it’s been tough.
While Manley’s customers have been supportive — some have even given Chhay $20 tips — business dropped off with the onset of the pandemic and has been slowing again lately.
And of course the struggles of small businesses have affected many of their landlords. While they may not be getting rent from some of their tenants, their own creditors aren’t giving them a break, said Dennis Wang, president of San Jose’s Chinese American Chamber of Commerce.
“On the landlord’s side, the insurance, the mortgage company, the taxes and everything, we don’t get a break,” Wang said. “You pay in full, otherwise you get a late charge or bad credit report or a foreclosure.”
Gov. Gavin Newsom and the county could extend the moratorium if the pandemic continues to threaten small businesses next year. But it’s not certain they will do so.
One thing is for certain, a lot of these cases are going to end up in court. Disputes are EVERYWHERE. And when those nasty things affect YOU and YOUR business including contract issues, landlord/tenant matters, nuisance ADA claims and even collections, call in the good guy business litigator Dean Sperling who will work to resolve YOUR matter with YOUR best interests in mind!
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