Companies that hardly survived 2020 have one other powerful blow forward — the tip of the county’s moratorium on evictions.
The measure bars landlords from evicting industrial tenants who haven’t been paying their hire. It expires on March 31 and, when it does, companies that haven’t paid hire are on the hook for paying all of their excellent again hire inside a yr.
On condition that the financial system remains to be sputtering, unemployment remains to be excessive, and the COVID-19 outbreak has worsened dramatically — probably miserable enterprise nonetheless additional — many native enterprise homeowners are frightened concerning the moratorium’s expiration, advocates say.
“There’s nonetheless nice worry, and that is just the start,” stated Dennis King, director of the Silicon Valley Small Enterprise Improvement Middle. “The hire is only one extra of the general monetary crises that they’re going through.”
Santa Clara County adopted the eviction moratorium in March, following an executive order from Gov. Gavin Newsom that allowed it and different counties to enact such prohibitions. It protects small companies which might be unable to pay their hire as a result of they’ve suffered “substantial” lack of revenue or medical bills because of the pandemic. The county has prolonged the moratorium a number of instances, most just lately in November, when it pushed again the expiration till the tip of March.
As soon as the moratorium expires, companies are required to pay at the least 50% of their past-due hire inside six months. They’ll have one other six months to pay again the remaining.
The pandemic has been exhausting on small companies — and their landlords
Whereas the moratorium has helped some native companies hold their doorways open in the meanwhile, many such businesses might be in dire straits when it expires. The stay-in-place orders issued by the county to attempt to management the pandemic have prevented many companies from staying open, a lot much less making a living. Ought to the pandemic proceed to thwart small enterprise homeowners’ efforts to generate income, many shall be in even worse monetary form when the moratorium ends.
“The on-again, off-again for nail salons, magnificence salons, and eating places has been very detrimental,” King stated.
Judy Chhay, who has co-owned Manley’s Donut Store in downtown Willow Glen together with her husband for 5 years, is among the many native enterprise operators who’ve been struggling to make ends meet. Chhay has continued to pay hire, however it’s been powerful.
Whereas Manley’s clients have been supportive — some have even given Chhay $20 suggestions — enterprise dropped off with the onset of the pandemic and has been slowing once more currently.
“We’ve acquired sufficient, working seven days (per week),” she stated. “We have now barely sufficient for the hire.”
The struggles of small companies have affected a lot of their landlords. Whereas they is probably not getting hire from a few of their tenants, their very own collectors aren’t giving them a break, stated Dennis Wang, president of San Jose’s Chinese language American Chamber of Commerce.
“On the owner’s aspect, the insurance coverage, the mortgage firm, the taxes and all the pieces, we don’t get a break,” Wang stated. “You pay in full, in any other case you get a late cost or bad credit report report or a foreclosures.”
Wang’s frightened that issues may worsen for each tenants and landlords. The county’s updated stay-at-home order, which took effect Dec. 4, compelled many companies to shut their doorways once more and others to scale back the variety of folks they will serve at anyone time. That makes it troublesome for enterprise homeowners to pay again hire they owe from the moratorium interval, he stated.
“While you attempt to get the again hire, it’s very powerful,” he stated. “When the deadline comes and (enterprise homeowners) aren’t capable of pay the hire, what are you going to do?”
Gov. Gavin Newsom and the county may prolong the moratorium if the pandemic continues to threaten small companies subsequent yr. However it’s not sure they’ll achieve this.
Vic Farlie, a senior government analyst in San Jose’s Workplace of Financial Improvement, stated it’s a good suggestion for enterprise homeowners and their landlords to speak with one another and attempt to work out an association for excellent hire earlier than the moratorium expires.
“Nonetheless difficult, that is preferable to litigation which will be costly and time consuming,” he stated. “Within the present financial situations the property market is greatest served when each events can negotiate an settlement.”