Small Business Help
Last week, the Santa Barbara City Council voted unanimously to pass a moratorium on evictions for both residential and commercial tenants through the end of May; a similar moratorium was passed by the Santa Barbara County Board of Supervisors as well, ensuring that residential and commercial tenants in unincorporated areas of the County are not faced with evictions if they are unable to pay their rents due to financial hardship related to the coronavirus crisis.
Both moratorium ordinances explicitly state that the urgency ordinance does not relieve a tenant’s obligation to pay rent, nor do they restrict a landlord’s ability to recover rent due. “Through May 31, 2020, or until the Santa Barbara County local health emergency proclamation is terminated, whichever is earlier, the owner of residential or commercial real property shall not terminate a tenancy for failure to pay rent if the tenant demonstrates that the failure to pay rent is directly related to a substantial loss of income or substantial out-of-pocket medical expenses associated with the coronavirus pandemic or any local, state, or federal government response to the pandemic,” reads the urgency ordinance of the County. The tenant must provide written notice to the property owner that there has been a substantial loss of income from a job loss, layoff, or a reduction in number of compensable hours of work; that there has been a closure of the tenant’s store or business; there has been a need to miss work to care for home-bound school aged children, or a family member infected with the coronavirus; or substantial out-of-pocket medical expenses related to the pandemic.
Tenants in the City of Santa Barbara must show proof of financial hardship before the 20th of April and May, and City Councilmembers decided against setting a deadline for tenants to payback missed rents. Instead, the Council agreed to encourage landlords and tenants to work together based on specific situations.
The recently adopted CARES Act, which allocates $350 billion to small businesses to keep workers employed amid the pandemic and associated economic downturn, may be of big help to small businesses in Santa Barbara County. The emergency loans provision of the CARES Act, also known as the Paycheck Protection Program, lets small businesses borrow as much as $10 million with an interest rate no higher than 4%. These loans, backed by the Small Business Administration (SBA), may be forgiven as long as companies meet certain conditions, including maintaining or restoring average payroll.
Locally, many commercial landlords are trying to ease the burden of the situation, deferring or forgiving rent, or offering a discount. “It’s very confusing for everyone,” said Coast Village Association board president Bob Ludwick, who is keeping tabs on both the business owners and property owners along Coast Village Road. “There is no playbook, but it is somewhat like a hurricane devastating the whole country. No one is exempt, no one is not impacted. No one,” he said.
To learn more about the emergency loans, visit www.uschamber.com/co/.