Madame Chair, Senators, Sarahann Shapiro with BOMA California.
The substantial impact of this bill on private contracts is not Appropriate nor Reasonable and the bill is therefore Unconstitutional. We therefore suggest the following:
1. Fundamental fairness argues that if you are going to defer rent, the portion of rent to be deferred should be pro-rated based on the proportionate loss of revenue, not absolute. If a Tenant’s revenue is down 40%, then only 40% of rent should be deferred. To do otherwise gives a windfall to the Tenant at the expense of the landlord.
2. If tenants do not pay the deferred rent on time under the new schedule, then all late fees and interest charges should be reinstated. This would incentivize tenants to perform their part of the deal and does not add any burden to them if they perform.
3. The requirement that landlords have to send a notice about this law to all tenants within thirty days is unreasonably burdensome. It will cost millions of dollars. Instead, this legislation should only require a disclosure in any notice that threatens forfeiture of a lease for a monetary default so the information gets to the tenant when it matters.
Finally, Section 2 of the bill is unnecessary and
should be dropped in its entirety. Section 1 covers all
tenants and restaurants should not get a better deal. It is
not necessary to cancel leases and guaranties to serve the
If the purpose of the bill, that justifies
cutting into Constitutional rights, is to keep businesses in
their spaces, then giving some tenants the right to
terminate their leases turns that on its head. And excusing
guarantors, who always ran the risk of the tenant going
out of business, is uncalled for, unreasonable and
We therefore urge you to vote no on SB 939.