Everything You Need to Know About the CARES ACT

Everything You Need to Know About the CARES ACT

Commercial or Residential Rent

In response to the COVID-19 pandemic, state, local and federal governments have swiftly enacted eviction moratoria aimed at protecting both residential and commercial tenants. While the specifics vary from jurisdiction to jurisdiction and are constantly evolving, the protections are generally tied to a tenant’s inability to pay rent as a result of the effects of COVID-19.

Mayor Garcetti and Governor Newson activated moratorium in Los Angeles and California with respect to commercial and residential rent requirements.  It applies to both commercial and residential rents.  You must notify your landlord and let them know that you have been negatively affected by the Covid-19 if unable to make your rent payments.  We have seen articles which require the tenant to show landlords proof that tenant is unable to pay as a result of Covid-19.  If you can work out a deal with your landlord in advance, that is recommended.  Please note, even if you manage to have the landlord agree to some sort of modification to your rent, you will owe this rent no matter what after the expiration of the emergency pandemic orders (90 days Commercial properties and 365 days Residential properties).  You must pay the unpaid portion of the rent (March, April, May and June only) and pay it back within three to six months depending if a you are commercial or residential tenant (12-months).  It should be noted that if you are able to obtain the streamline PPP loan from the government and pay your rent with these funds, this loan may be forgiven (no need to pay back to the government after they obtain and review various documents).  I recommend to work on a modification plan with your landlord and if not able to, pay the rent as soon as you can and apply for CARES Act disaster loan (PPP and EIDL) and show proof after use of funds to have it be forgiven.  

Following a unanimous vote on May 6, 2020, the Los Angeles City Council adopted Ordinance No. 186606 (the “Ordinance”), which updates the existing ordinance affecting tenants in the City of Los Angeles. The Ordinance modifies the existing protections with respect to the moratorium on commercial evictions, and more specifically provides that:

  1. Except for tenants that are multi-national companies, publicly traded companies, or companies that employ more than 500 employees, commercial tenants cannot be evicted until three (3) months following the Local Emergency Period, if the tenant is unable to pay rent due to the financial impacts of COVID-19.
  2. Eligible circumstances include: (a) loss of business due to COVID-19 workplace closures, (b) child care expenditures due to school closures, (c) health care expenses as a result of a COVID-19 sickness or the tenant caring for a family member that is sick with COVID-19 or (d) other reasonable expenditures that are a result of the government-ordered emergency measures.
  3. Landlords may not “endeavor to evict” tenants during the Local Emergency Period for circumstances due to COVID-19. The term “endeavor to evict” is defined in the Ordinance as any “conduct where the Owner lacks a good faith basis to believe that the tenant does not enjoy the benefits of this article [of the Ordinance] and the Owner serves or provides in any way to the tenant: a notice to pay or quit, a notice to perform covenant or quit, a notice of termination, or any other eviction notice.”
  4. Commercial tenants have three (3) months after the expiration of the Local Emergency Period to pay back deferred rent.
  5. Landlords cannot charge interest or late fees on unpaid rent during the Local Emergency Period.

The Local Emergency Period is retroactive starting March 4, 2020 and goes through the date when Mayor Garcetti deems the local emergency over.

In addition to the Ordinance’s prohibition on evictions related to the impacts of COVID-19, California’s Judicial Council (the rule-making body for state courts) has implemented emergency rules suspending the issuance of summons and entering default judgments in eviction proceedings. As a result of these rules, eviction proceedings are effectively not moving forward in state courts.

Please see below additional links and information for reference depending on the type of property.


City of LA Housing Authority


Los Angeles Residential RSO Units

An Owner shall: (i) provide written notice to each residential tenant of the protections afforded by this article (“Protections Notice”) within 15 days of the effective date of this ordinance; and (ii) provide the Protections Notice during the Local Emergency Period and for 12 months after its termination each time the Owner serves a notice to pay or quit, a notice to terminate a residential tenancy, a notice to perform covenant or quit, or any eviction notice, including any notice required under California Code of Civil Procedure Section 1161 and California Civil Code Section 1946.1. HCID shall make available the form of the Protections Notice, which must be used, without modification of content or format, by the Owner to comply with this subparagraph. HCID will produce the form of the Protections Notice in the most commonly used languages in the City, and an Owner must provide the Protections Notice in English and the language predominantly used by each tenant.


Commercial Leases


Eviction Moratorium

CARES Disaster Loan Program (Paycheck Protection Program PPP)

The CARES disaster program (approved by senate and congress) will be online by Friday, April 3, 2020. It is not the same program as regular SBA as it is a completely different.  You must work with your existing bank (Business Bank Accounts). Each business must certify that:

  • the loan is necessary due to the uncertainty of current economic conditions caused by the global COVID-19 pandemic,
  • that the borrower will use the funds to retain workers and maintain payroll, lease, utility payments and
  • the borrower is not receiving duplicate funds for the same uses from another SBA program.

There are no credit requirements but only the requirement that the business had employees and paid salaries/payroll taxes and/or had independent contractors workers. It could take up to two weeks for you to get the loan. You can only get 250% of the employer’s average monthly payroll expense (Not greater than $100,000 per year per employee which consists of salary, wage, commission, or similar compensation; cash tip or equivalent; vacation, parental, family, medical, or sick leave; allowance for dismissal or separation; payment required for the provisions of group health care benefits, including insurance premiums; payment of any retirement benefit; or payment of State or local tax assessed on the compensation of employees) and the amount received can be paid to your employees, rent, mortgage and interest payments.

For Example: If your payroll expenses are $100,000 per month for all employees, you can only get $250,000.

Fully/Partially Forgiven:

If you use this amount to pay back your employees, utilities and rent, a portion of the loan amount will be forgiven. Just in case these loans are not forgiven, the rate is ONLY 1.00% over five years with no payment for six months.  You and your business should obtain these loans if you qualify for no matter what and use the funds to at least pay your rent (concentrate on paying your employees to have the loan forgiven). Funds are provided in the form of loans that will be fully or partially forgiven when used for payroll costs, interest on mortgages, rent, and utilities (at least 60% of the PPP loan amount must have been used for payroll). Funds must be used within 24 weeks to qualify for forgiveness.  No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Must Keep Employees on the Payroll—or Rehire Quickly:

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels prior to the pandemic in 2020 quarter 1. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.

Loan Forgiveness

Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels. Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease. The loan forgiveness form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:

  • Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
  • Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
  • Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
  • Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring within 24-weeks of funding
  • New exemption for the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that have declined

Please click here to get the forgiveness application:


I know many of you are reserved in paying your employees if your offices are closed.  As mentioned above, if you pay the disaster loan funds for the employee payroll, you will have the disaster loan forgiven.  If you fired your employees but bring them back before June 30, 2020, then the forgiveness will take into effect and no loss (forgiveness may get prorated).  If you have let your employees go, please communicate with them regularly so you can bring them back asap versus them going with another employer.  Make sure you bring them back by June 30, 2020 so you can have the loan forgiveness intact for CARES disaster loan purposes/obtained.   


The amount given per week now includes an additional $600.00 per week (from March 29, 2020 to July 31, 2020) for a total amount of $1,000 per week.  Employees who have been negatively impacted should use this program.  If you are self-employed S-Corp, you can also take advantage of this program.  There is no waiting period and can take advantage as of the date negatively impacted.  For self employed companies, please note this may or may not affect your unemployment tax rate in the future, but if have been negatively impacted, you should utilize this program as well.  This program may be used if there is no employment income and/or you have been impacted as a result of Covid-19.  Please see below links for application and further pandemic unemployment assistance information:

Stimulus Checks

If your 2019 AGI income (if not completed, your 2018 tax returns) for married people is below $150,000 ($75,000 single), you will get $1,200 per person and $500 per child.  If you make between $150k-$198k ($75k-$99k single), your check will be reduced $5.00 for every $100.00 of additional AGI.  Please note if your income for 2018 and 2019 are higher and in 2020 you make below these amounts, the government will send you the stimulus check in 2021 after you file your taxes in 2020.  Those individuals who don’t file taxes (Social Security income earners) will also receive these stimulus checks.  Please note these checks will be direct deposited (if you have an account with IRS or if IRS has your account info) starting week of April 12, 2020 or mailed 2-3 weeks after. 

IRS created website for individuals to input their secured account info at a letter time.  Please visit link below and input your secure account information on IRS' website.


Please review link below for more information. 


Please see below calculator to figure out your stimulus check amount.

Property Taxes

The County Collector requires the same deadlines, but if you don’t make your payment on time, you can submit a request to them to waive the fee (after April 11, 2020).  I recommend for you to pay on time if not done already.  

Personal Taxes (Federal and California)

Both federal and state taxes are delayed to July 15, 2020.

Other SBA Loans (Economic Injury Disaster Loan)

On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by COVID-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL).  The Advance is available as part of the full EIDL application and will be transferred into the account you provide shortly after your application is submitted.  To ensure that the greatest number of applicants can receive assistance during this challenging time, the amount of your Advance will be determined by the number of your pre-disaster (i.e., as of January 31, 2020) employees. The Advance will provide $1,000 per employee up to a maximum of $10,000.

You can apply for other SBA loans (EIDL).  Loan advances of up to $10,000 do not require repayment.  You can apply for Working Capital Loans up to $2MM.  You can apply under the Economic Injury Disaster Loans and Loan Advance.

Loan Terms after $10,000 Grant amounts are:

3.75% interest rate over 30 years with no payments up to 12 months. Credit Scores and 6-months revenues included in determining amount.  No collateral up to $25,000 

Federal Student Loans

If you have federal student loans, interest rate is at zero now.  You can request three months forbearance plans.  Private student loans remain as is now, but you can contact them for assistance.   

Mortgage and Home Equity Account

Many lenders are able to freeze the mortgage payments for three months without reporting negatively to the credit agencies.  Each lender is different, and you have to contact them to see if they will put the three months at the end.  After the three months, the lenders should be able to continue the assistance.  It has been our experience that majority of the mortgage/equity lenders are easily handling such requests.  Please contact your lender to inquire. 

Additional Loan Resources

Los Angeles Emergency Bill offering Microloans between $5,000 and $20,000


CDC Small Business Finance Emergency Relief Small Business Loans


Facebook grants for small businesses: