Commercial leases during COVID-19

The ordinance does not permanently absolve tenants from their rent obligations. After the emergency ends, tenants who defer rent will still owe the back rent to their landlord unless they are able to negotiate new lease terms.

• Deferred rent
• Limit on rent increases
• Legal resources

Deferred rent

Businesses and non-profits can qualify for deferred rent if they:

• had to close due to COVID-19
• have had to reduce operations to limited virtual, take-out, or pickup services only
• have suffered a material loss of income

Impacted tenants will have twelve months after the local state of emergency ends to pay back the rent they owe. Landlords may not charge late fees, fines, or interest on deferred rent during this period.

To qualify for deferred rent, tenants should notify their landlord no more than 7 days after rent is due. A simple written notification via email or mail is sufficient. Tenants do not need to provide documentation showing how the business was impacted by the pandemic in advance. However, it is important to save documentation such as bank statements or records of closure, as landlords may request this information when the state of emergency is over.

Limits on rent increases

While the Governor’s Executive Order executive order authorizing local governments to halt evictions is in effect, the maximum rent increase a landlord may impose on commercial tenants who have been impacted by COVID-19 is 10%.

This Order currently expires on September 30. Unless the Order is extended, this restriction will also expire at that time.

Legal resources for commercial tenants and landlords

The City cannot provide legal advice on lease negotiations. The organizations below may be able provide legal assistance or referrals.

• UC Berkeley Law Community Law Clinic provides free legal assistance to survive the COVID-19 pandemic to small businesses that can't afford an attorney. Email newbusinesslaw@berkeley.edu for support.

• Alameda County Small Business Development Center offers free business counseling, including referrals for legal guidance.

• Alameda County Bar Association Lawyer Referral Service (LRS) can provide information about pro bono legal programs in the area and will match clients with attorneys for a $40 nonrefundable referral fee. Depending on income and the type of legal assistance needed, some clients may be eligible for reduced rates.

For information on negotiating a percentage based rent or other rental fee structures that take into account earnings and landlord/tenant costs, see a webinar on Retail and restaurant lease negotiations during COVID-19 hosted by Northern California Small Business Development Centers.

Last updated August 18, 2020