• UPDATE – Status of Eviction Moratoriums Protecting Residential and Commercial Tenants in Response to COVID-19 Pandemic

    Since we last reported on this topic, many of the residential and commercial eviction moratoriums that were enacted in response to the COVID-19 pandemic have been amended, replaced and/or extended. These moratoriums are generally set to expire on June 30, 2021. Depending on how COVID vaccination and the broader economic recovery play out in the coming months, these moratoriums may be further extended.

    Residential Evictions

    At the state level, the COVID-19 Tenant Relief Act (“CTRA”), which protects residential tenants from eviction for non-payment of rent due to COVID-19, is comprised of two statewide laws, AB 3088 and SB 91. Together, these laws have imposed a statewide eviction moratorium on evictions from March 1, 2020 through June 30, 2021 (the “State Moratorium Period”), and have replaced most of the local residential eviction moratoriums that were enacted at the start of the pandemic.

    Under the CTRA, a residential tenant that owes rent during the State Moratorium Period cannot be evicted for failure to pay rent so long as they provide the landlord with a signed declaration claiming financial hardship related to COVID-19 within the required timeframe, and, on or before June 30, 2021, the tenant pays 25% of the rent owed to the landlord during the period from September 1, 2020 through June 30, 2021. Tenants remain responsible for paying any unpaid rent to landlords, but those unpaid amounts are not a permitted basis for eviction or late fees. Landlords may begin to recover unpaid rent on or after August 1, 2021 in small claims court (even if the amount of unpaid rent exceeds $5,000).

    Commercial Evictions

    Although the CTRA only applies to residential tenants, Governor Newsom’s Executive Order N-80-20 (“EO N-80-20”) grants local governments the authority to enact protections for commercial tenants. Many local governments that have enacted commercial eviction moratoriums have tied the effectiveness of the protections to EO N-80-20, which is currently set to expire on June 30, 2021. Key provisions of some of the most important Bay Area commercial eviction moratoriums include:

    City and County of San Francisco:

    On November 25, 2020, the San Francisco Board of Supervisors adopted an Ordinance (the “SF Ordinance”) to address commercial evictions (which replaced the March 18, 2020 Mayor’s Order that is no longer in effect). Under the SF Ordinance, if a “covered commercial tenant” misses rent payments from March 16, 2020 through June 30, 2021 (the “SF Moratorium Period”) because of financial impacts resulting from the COVID-19 crisis, the landlord may not evict the covered commercial tenant.

    A “covered commercial tenant” is a tenant that (1) is registered to do business in San Francisco, and (2) has combined worldwide gross receipts for tax year 2019 equal to or below $25 million. However, the moratorium does not apply to for-profit entities occupying space in property zoned or approved for use as Office Use (as defined in Section 102 of the Planning Code), or to entities leasing property from the City and County of San Francisco.

    The landlord is not permitted to assess interest or other charges based on unpaid rents that were due during the SF Moratorium Period. Additionally, the landlord must provide smaller (fewer than 50 full-time employees) covered commercial tenants a forbearance period after the moratorium ends to repay the missed rent before it can evict a covered commercial tenant for non-payment. The forbearance period is tied to the number of full-time employees employed by the covered commercial tenant, and ranges from 12 to 24 months after the end of the SF Moratorium Period. The SF Ordinance will expire upon expiration of EO N-80-20 or any extensions of the order (currently set to expire on June 30, 2021). If EO N-80-20 is further extended, the SF Ordinance will automatically be extended by its terms.

    The SF Ordinance provides additional protection to small business owners with 10 or fewer full-time employees (“Tier 1 Tenants”). A Tier 1 Tenant that is unable to pay rent due to financial impacts related to COVID-19 has the option, despite any terms in the lease to the contrary, to terminate its lease if it fails to reach a mutually satisfactory agreement for repayment with the landlord.

    More detailed information on the SF Ordinance can be found here.

    City of Oakland:

    Under the City of Oakland’s commercial eviction moratorium, landlords are not permitted to evict small businesses (generally independently owned and operated businesses, which together with their affiliates have 100 or fewer employees, and average annual gross receipts of $15 million or less over the previous three years – more particularly defined in Government Code Section 14837(d)(1)(A)), and nonprofit organizations for failure to pay rent if such failure is due to a substantial decrease of income caused by the COVID-19 pandemic or by any governmental response to COVID-19, and is documented. This does not relieve commercial tenants of the obligation to pay back rent in the future. The City of Oakland’s commercial eviction moratorium will expire upon expiration of EO N-80-20 or any extensions of the order (currently set to expire on June 30, 2021). If EO N-80-20 is further extended, the City of Oakland’s commercial eviction moratorium will automatically be extended by its terms.

    Contra Costa County:

    On February 2, 2021, the Contra Costa County Board of Supervisors unanimously passed Urgency Ordinance No. 2021-04, which extended the temporary commercial eviction moratorium for commercial tenants through June 30, 2021. Under Urgency Ordinance No. 2021-04, landlords cannot evict a commercial tenant for failure to pay rent if the tenant demonstrates that failure to pay is directly related to a loss of income associated with the COVID-19 pandemic or any local, state or federal government response to the pandemic. In order to qualify, a tenant must document the loss of income. Landlords cannot charge or collect late fees on any unpaid rent from a commercial tenant who demonstrated loss of income. Commercial tenants have a grace period ending August 31, 2021 (unless the landlord agrees to a longer repayment period), to pay past due rent for the period from March 16, 2020 to June 30, 2021.

    Santa Clara County:

    On November 3, 2020, the Santa Clara County Board of Supervisors enacted Ordinance No. NS-9.293, which extended Santa Clara County’s eviction moratorium for small business tenants until the earlier of the expiration of EO N-80-20 or April 30, 2021. Unlike the other local eviction moratoriums described above, Santa Clara County’s eviction moratorium is currently set to expire on April 30, 2021. Small business tenants (defined in the U.S. Small Business Administration’s table of size standards by industry, codified in the Code of Federal Regulations at 13 C.F.R. Section 121.201) have 6 months after the moratorium expires or terminates to repay at least 50% of the past-due rent, and up to 12 months after the moratorium expires or terminates to repay in full the past-due rent. Landlords cannot charge late fees on unpaid rent due so long as the rent is repaid according to the above timeline. Santa Clara County’s commercial eviction moratorium does not prevent a landlord from pursuing lawful or “at-fault” evictions for reasons other than non-payment of rent.

    We will continue to monitor developments to the state eviction moratorium and local eviction moratoriums across the Bay Area. Contact Real Estate attorneys Tamara Lam-Plattes at tlam-plattes@coblentzlaw.com or Leah Collins at lcollins@coblentzlaw.com for additional information.

  • AB 1561 Extends Housing Entitlements by 18 Months

    The state has granted an 18-month extension to certain housing development entitlements that were otherwise due to expire before the end of 2021. AB 1561 (Garcia) was enacted last year to support continued housing production in light of the ongoing economic and administrative challenges created by the COVID-19 pandemic. Its provisions apply to approvals, permits, and entitlements for housing development projects issued by a state or local agency that were in effect on or before March 4, 2020 and that would otherwise expire before December 31, 2021. Under AB 1561, these housing entitlements are extended for 18 months from their original expiration date.

    This 18-month permit extension applies to entitlements for housing development projects and mixed use projects in which at least two-thirds of the square footage is residential, including the following:

    A. State Permits: A legislative, adjudicative, administrative, or any other kind of approval, permit, or other entitlement necessary for, or pertaining to, a housing development project issued by a state agency;
    B. Local Permits: An approval, permit, or other entitlement issued by a local agency for a housing development project that is subject to the California Permit Streamlining Act (Gov. Code § 65920 et seq., which includes a broad range of discretionary development approvals);
    C. Ministerial Permits: A ministerial approval, permit, or entitlement by a local agency required as a prerequisite to the issuance of a building permit for a housing development project;
    D. Application Submittal Deadlines: A requirement to submit an application for a building permit within a specified period of time after the effective date of a housing entitlement described in subparagraph (B) or (C); and
    E. Vested Rights: A vested right associated with an approval, permit, or other entitlement described in (A)-(D), above.

    Some limited exceptions apply; for example, the legislation does not extend the life of development agreements or projects approved pursuant to the SB 35 ministerial streamlining process. Additionally, the protections of AB 1561 do not apply to housing entitlements that were previously extended by at least 18 months by a local agency on or after March 4, 2020 and before September 28, 2020 (the effective date of AB 1561). However, the protections otherwise support a broad range of housing-related approvals, reflecting the legislature’s intent to provide developers with a longer runway to support the construction of housing development projects in the context of a state-wide undersupply of housing intensified by the pandemic-induced recession.

    Extensions for San Francisco Projects

    On March 16, 2021, San Francisco’s Zoning Administrator issued a Letter of Determination indicating that the City’s typical approval condition, which provides extensions for delays caused by a public agency, an appeal, or legal challenge, is deemed trigged for the recognized delay period of March 17, 2020 through March 16, 2021. For example, if a project’s required performance period is July 17, 2017 to July 17, 2020 (otherwise expiring 4 months after the beginning of the recognized delay period), the performance period is extended for 4 months (the duration of the overlap between the performance period and the recognized delay period in this example). Any such extension granted by the City of San Francisco runs concurrently with the 18-month extension granted by AB 1561.

    No additional action is needed by state or local agencies to apply the 18-month extension to covered housing entitlements. However, interpretation and implementation may vary by individual agency, so it is advisable to consult with counsel on a project-specific basis about the analysis and how best to memorialize the extension.

  • Are You Prepared to Submit Your Employee Pay Data to the DFEH?

    By Fred Alvarez

    On September 30, 2020, the California legislature passed SB 973, California’s pay equity data law. The law, codified under Government Code section 12999, requires certain employers with California employees to file an annual Employer Information Report that includes employee data on pay, hours, and demographics (“pay data”). Pay data is due to the DFEH (California Department of Fair Employment and Housing) on March 31, 2021.

    Who Must Report?

    All private employers with “100 or more U.S. employees and who [are] required to file an annual Employer Information Report (EEO-1) pursuant to federal law,” and at least one California employee must file an annual Employer Information Report.

    An employer has the requisite number of employees if the employer either employed 100 or more employees in the Snapshot Period chosen by the employer or regularly employed 100 or more employees during the Reporting Year. The Snapshot Period is a single pay period between October 1 and December 31 of the Reporting Year, which is “the prior calendar year.” For this year, then, the Reporting Year is January to December 2020, while the Snapshot Period is any pay period between October 1 and December 31, 2020.

    What Must Employers Report?

    Employers must report data similar to what was required in the federal EEO-1, Component 2 form. The EEOC has since discontinued the use of the Component 2 form, but is studying the data it has collected from employers so far. In enacting SB 973, the California legislature has decided to pick up where the EEOC left off.

    DFEH has now provided a data report template for both Excel and CSV files here.

    As seen in the template reports, employers must provide the following data:

    • For each establishment, during the Snapshot Period, the number of employees by race, ethnicity, and sex in ten different job categories.
    • The number of employees—by race, ethnicity, and sex—whose annual earnings fall within each of twelve pay bands ranging from $19,239 and under to $208,000 and over.
    • The total number of hours each employee worked during the entire Reporting Year, plus any paid time off hours.
    • The Reporting Year and the Snapshot Period the employer selected.
    • Additional employer information, including contact information, NAICS codes, total number of employees, and total number of establishments.
    • Any clarifying remarks.
    • A certification that the information contained in the pay data report is accurate and prepared in accordance with the law.

    Employers must submit their pay data reports to DFEH’s pay data submission portal here. DFEH has also provided answers to common questions here.

    How Will The Pay Data Be Used?

    The California Legislature enacted this bill to encourage employers to self-assess potential pay disparities among their employees across race, gender, or ethnicity lines, and to promote compliance with equal pay and anti-discrimination laws.

    It is important to note that the law now empowers DFEH to “receive, investigate, conciliate, mediate, and prosecute” complaints alleging unlawful practices in violation of the Equal Pay Act. The law also provides the Division of Labor Standards Enforcement access to this data, an authority already empowered to enforce labor laws.

    These pay data reports are supposed to be a tool for self-compliance by employers and a tool for California agencies to enforce equal pay and anti-discrimination laws. As explored further below, however, challenges may arise when analyzing the pay data. For example, the reported job categories easily encompass employees with a variety of educational and professional backgrounds, roles, and responsibilities. In fact, the EEOC recently announced a contract with the National Academies of Sciences, Engineering, and Medicine’s Committee on National Statistics to independently assess the “quality and utility” of the equivalent federal pay data. The analysis is expected to conclude in 2021, but may shed significant light on employer concerns about the usefulness and validity of combining so many different jobs into the broad EEO-1 categories.

    The California pay data is confidential under the law, and not subject to the California Public Records Act. It will not, however, be kept confidential for “administrative enforcement or through the normal rules of the discovery in a civil action.” DFEH is also empowered to publish aggregated data from multiple employers.

    What Issues Should I Be Aware of When Gathering and Submitting Pay Data?

    Identifying Employees

    The definition of employee under Government Code section 12999(m)(1) is, “an individual on an employer’s payroll, including a part-time individual, whom the employer is required to include in an EEO-1 Report and for whom the employer is required to withhold federal social security taxes from that individual’s wages.” This definition raises a number of considerations when categorizing and counting employees.

    Some issues to watch out for when identifying employees and tallying up your total number of employees include:

    • Making sure that you count both full-time and part-time workers;
    • Determining whether any temporary workers provided by a staffing agency or independent contractors still meet this definition of “employee;” and
    • Identifying employees located both inside and outside of California, and correctly categorizing teleworking employees (for example, all employees assigned to California establishments must be reported whether or not they are teleworking).

    Multiple Establishment Companies & Multiple Entities

    Both single-establishment and multiple-establishment employers should submit single pay data reports. Multiple-establishment employers should report on all of their establishments.

    Additionally, if your company is a parent company or a subsidiary, you should consider how to collectively submit pay data. Parent companies may submit a pay data report for themselves and their subsidiaries if the companies constitute a single legal entity. Alternatively, parent companies and their subsidiaries may each submit their own pay data reports.

    Gathering and Submitting Pay Data

    There are a number of challenges embedded in the pay data reporting framework.

    Employee Demographic Data

    First, employers must report on employees race, ethnicity, and sex. While employee self-identification is the preferred method of identifying an employee’s race, ethnicity, and/or sex, employers must still report the demographic data of employees who decline to provide this information. That means employers should use current employment records, other reliable records or information, or, as a last resort, observer perception. Employers should be particularly sensitive regarding the use of observer perception to categorize and report on an employee’s demographic data. In fact, the DFEH has indicated that observer perception should not be used to identify employees’ sex, but rather information such as the employees’ preferred pronouns.

    Moreover, the available demographic categories are themselves limited. Employers should report employees’ sex by the three genders recognized in California: female, male, and non-binary. Employers should report race and ethnicity according to the following seven categories:

    • Hispanic/Latino
    • Non-Hispanic/Latino White
    • Non-Hispanic/Latino Black or African American
    • Non-Hispanic/Latino Native Hawaiian or Other Pacific Islander
    • Non-Hispanic/Latino Asian
    • Non-Hispanic/Latino American Indian or Alaskan Native
    • Non-Hispanic/Latino Two or More Races

    But not all employees will easily fit into one of these categories. For example, a male trans employee may self-identify as either male or non-binary. Similarly, an employee with both Hispanic/Latino heritage and Non-Hispanic/Latino heritage may not self-identify with any of the race/ethnicity categories above.

    Employee Job Category Data

    Second, employers must categorize employees as fitting into one of ten broad EEO-1 job categories used by the EEOC:

    • Executive or senior level officials and managers;
    • First or mid-level officials and managers;
    • Professionals;
    • Technicians;
    • Sales workers;
    • Administrative support workers;
    • Craft workers;
    • Operatives;
    • Laborers and helpers; and
    • Service workers.

    Each of these categories is extremely broad both in terms of the types of job it encompasses, and the educational or experiential backgrounds of individual employees in that category. For example, the “Professionals” category includes both architects and dentists—and it includes architects and dentists with both thirty years’ experience and with five years’ experience. Further guidance on these categories is available on the EEOC.gov website.

    Employee Salary Data

    Employers must provide employee salary data into one of 12 pay bands increasing from $19,239 and under to $208,000 and over. These pay bands are thus particularly limited for highly-paid employees. For example, if all of a company’s employees in the job category “executive or senior level officials and managers” are paid $250,000 or more, the pay bands would not track differences in that high level of compensation among employees of different races, ethnicities, or sexes.

    Putting It All Together

    Given the analytical limitations of combining numerous, distinctive jobs into one of ten broad job categories, and then inserting them into 12 arbitrary pay bands, and the likelihood that the data will be (1) used in an enforcement action by a California state agency, or (2) uncovered via civil discovery methods, employers should consider providing “clarifying remarks” when submitting pay data. Clarifying remarks provide employers the opportunity to note the problems inherent in the pay data categories, and to preemptively note that any apparent pay disparities do not reflect comparisons of comparable jobs, employee roles, educational backgrounds, or seniority associated with jobs included and aggregated for reporting purposes only.

    What Should I Do If I Have Additional Questions?

    If you have specific questions or want to discuss how the Pay Equity Data Law may affect your business, please contact Fred Alvarez at falvarez@coblentzlaw.com or any attorneys from the Labor and Employment team here at Coblentz Patch Duffy & Bass LLP.

  • San Francisco Kicking Off General Plan Update Process: Virtual Workshops Coming March 15th

    The San Francisco Planning Department is updating the City’s General Plan, and Department staff will be holding a two-week series of online workshops on the proposed General Plan updates beginning Monday, March 15th. All development projects must be consistent, on balance, with the General Plan’s objectives and policies, so these updates are of high interest for San Francisco developers.

    Key General Plan Elements undergoing significant updates include the Transportation Element, the Community Safety Element, and the Housing Element. These updated elements will include environmental justice policies per the requirements of California Senate Bill 1000, which we blogged on in 2018. According to the Department, this round of General Plan updates will focus on goals and policies addressing racial and social equity, housing, transportation, climate resilience, and environmental justice.

    The two-week workshop series is designed to gather public input via Zoom on the updates to the General Plan and to allow Planning Department staff to provide overviews of the various topics being addressed in the updates. Planning Department staff has indicated that the workshop series will also serve a capacity-building purpose, by encouraging meaningful and ongoing public engagement in the planning process, particularly among those San Franciscans who historically have been underrepresented in the planning process.

    Registration for the online workshops can be accessed at this link. We will keep you posted on the timing and schedule for the General Plan updates as that information becomes available.

  • What 2020 Land Use Cases Taught (Or Reminded) Us About Litigation Basics

    By Skye Langs

    Last year brought the legal profession many things that we never expected, like trials conducted by Zoom and virtual happy hours, just to name a few. But it also brought a handful of new CEQA and land use decisions that, like many of the events of 2020, reminded legal practitioners to focus on the fundamentals. In litigation, that includes document preservation, evidence, and remedies. These details, though often overlooked in writ proceedings, can make or break your case.

    Document Preservation

    Civil litigants who know or reasonably anticipate that litigation is on the horizon have a duty to preserve relevant documents or risk sanctions (including, in extreme cases, terminating sanctions). In Golden Door Properties, LLC v. Superior Court of San Diego County (2020) 53 Cal.App.5th 733, we were reminded that this rule applies with equal force to a public agency conducting CEQA review.

    In 2014, San Diego County began considering an approximately 600-acre residential and commercial development adjacent to the upscale Golden Door spa and resort. Almost immediately, Golden Door raised concerns about the project’s environmental impacts, and informed the County it would oppose the development. Nonetheless, the County took no special precautions to preserve documents or suspend its automatic deletion of emails.

    Four years later, after the publication of the project’s Draft Environmental Impact Report, Golden Door served the County with a Public Records Act request, seeking documents related to the project. In response, the County produced 42 emails. When questioned about the limited production, the County explained that it had a policy of automatically deleting emails after 60 days.

    The Fourth District Court of Appeal held that the County’s automatic deletion policy is unlawful because it destroys official records that the County is required to maintain. Specifically, CEQA provides that a broad range of documents “shall” be part of the record, including all correspondence and written materials relevant to the public agency’s compliance with CEQA or its decision on the project. (Pub. Res. Code § 21167.6.) By automatically deleting emails, the County made it impossible to create the required record.

    Without an adequate record, the County may not be able to demonstrate its compliance with CEQA, adequately inform the public about the project, or demonstrate to the Court that its decisions are supported by substantial evidence. In other words, like any civil litigant, the County risked being penalized in future litigation due to poor document retention policies. But this risk can be avoided. Public agencies (as well as developers who partner with them) can take steps to ensure that all documents relevant to a project’s approval are maintained, and available in the event of future litigation.


    Just as civil litigators know that documents need to be preserved, we also know that at trial, we need to present the evidence that proves our case. This means putting on reliable witnesses who can provide testimony that satisfies the legal standards we are trying to meet. And in Tiburon/Belvedere Residents United to Support the Trails v. Martha Company (2020) 56 Cal.App.5th 461, we learned that it doesn’t matter how many witnesses you put on if they don’t check these boxes.

    Petitioners Tiburon/Belvedere Residents United to Support the Trails (TRUST) sought quiet title to privately owned property north of San Francisco based on an alleged implied dedication that occurred prior to 1972, when a change in law essentially abolished implied dedications. To prove its case, TRUST needed to show that the property at issue was used by the general public, openly and continuously, for a period of more than five years preceding 1972, with full knowledge of the owner, without asking or receiving permission, and without objection.

    TRUST put on 28 witnesses who testified that from 1967 to 1972, they used the property for recreation, without permission from the owner, and without any objections. Despite the overwhelming number of TRUST witnesses, there were two fatal flaws in the evidence presented.

    First, and perhaps as an unavoidable consequence of the passage of time, almost half of its witnesses were minors in 1972. As the court noted, children are “‘born trespassers’ who cannot establish a reasonable belief by the public of its right to use the property.”

    Second, all of TRUST’s witnesses lived in the area at the time. In other words, their testimony did not demonstrate widespread use by the general public, but rather showed limited local use that the property owner may have consented to as a neighborly accommodation, or failed to notice due the low visibility associated with local, as opposed to widespread, use.

    In contrast, the property owner, who had diligently saved photographs showing fences, gates, and no trespassing signs on the property during the relevant time period, presented testimony demonstrating that it attempted to prevent public use. This, combined with the TRUST’s failure of proof, secured judgment in the property owner’s favor.

    The lesson here? Even if – or perhaps especially if – your case relies on events that occurred well in the past, the quality of your evidence matters. As you prepare for trial, make sure you have the witnesses, and the testimony, to prove each element of your claim.


    While we must focus on proving our case, we also can’t overlook the most important part – what we get if we win, and how to minimize our losses if we don’t. But in CEQA cases, it is common for petitioners to simply request that the project approvals be vacated, with little analysis or argument about how to craft that relief. Last year, Sierra Club v. County of Fresno (2020) 57 Cal. App. 5th 979, reminded us that we should take as much care with remedies in writ proceedings as we do with damages, declaratory relief, or other civil remedies.

    Sierra Club is the most recent installment of the Friant Ranch saga, which first began in 2007, when the County of Fresno issued its notice of preparation of a draft Environmental Impact Report (EIR) for a 942-acre master planned community. After the project was approved in 2011, litigation ensued, and the case has been working its way through the courts ever since. In 2018, the California Supreme Court concluded that the EIR’s discussion of the project’s air pollution impacts was inadequate, and remanded the case for further proceedings. (See Sierra Club v. County of Fresno (2018) 6 Cal.5th 502.) On remand, the trial court issued the requested writ of mandate, ordering the County to vacate the Friant Ranch project approvals and prepare a revised EIR.

    The developer argued that this remedy was improper, and that instead of vacating the project approvals in their entirety, the court should have ordered a partial decertification of the EIR. The Court of Appeal for the Fifth District disagreed, holding that the relevant statutory language does not allow for partial certification. CEQA requires that lead agencies “certify the completion” of an EIR, and its compliance with CEQA, in its entirety. (See Pub. Res. Code § 21100; 14 Cal. Code Regs. § 15090.) There is no half measure.

    One provision does, however, opens the door for partial decertification. Public Resources Code section 21168.9 contemplates that a court may issue a writ of mandate voiding a “determination, finding, or decision” of a public agency “in whole or in part.” While that language could support partial decertification of an EIR, the Court of Appeal concluded it was not proper in Sierra Club because the EIR’s air quality analysis was not severable from the other aspects of the project approvals.

    Setting aside the statutory language, and the question of severability, it is apparent that the trial court decertified the EIR in its entirety because this was the remedy sought by the petitioners. At no point prior to the issuance of the writ of mandate did the County or the developer argue that this relief was improper, or present an argument for partial, rather than full, decertification. If they had addressed the remedies before it was too late, and presented a full-throated argument for partial decertification, it is possible that they could have minimized the impacts of this loss.

    2021 and Beyond

    This year will likely bring the legal profession even more surprises. But taking care of the basics such as document preservation, evidence, and remedies can often make the biggest difference in disputes, no matter how large or complex.

  • Cities Tackle the Future of Single-Family Zoning, As State Takes Up the Issue Again

    In 2020, California legislators considered but ultimately did not approve bills that would have substantially restricted the continued use of single-family zoning across the state. These efforts included SB 50 (Wiener), which would have required increased residential density near qualifying transit, and SB 1120 (Atkins), which would have allowed duplexes on most residential lots across the state, including single-family zoning districts. Both bills, along with many other 2020 housing bills, died in chambers in the final moments of the legislative session. Read our previous coverage here.

    This year, legislators are back at work on similar legislation – SB 10 (Wiener), which would allow cities to up-zone qualifying parcels located in transit- or jobs-rich areas, and SB 9 (Atkins), a reprise of the SB 1120 duplex-zoning efforts. Both bills are already attracting attention from advocates and opponents of prior legislation. California’s effort to increase housing production and density through limits on single-family zoning comes in the wake of similar legislation in other parts of the country. In 2019, Oregon became the first state to adopt legislation effectively banning single-family zoning in many cities, and in 2018, the Minneapolis City Council unanimously voted to update its long-range Comprehensive Plan to eliminate single-family zoning.

    Now, a number of California cities – including several in the Bay Area – are taking up the issue directly. The City of Sacramento made headlines last month when its Council unanimously approved a draft proposal to allow up to four units on lots within its single-family and duplex zoning districts. The City of San Jose has established an “Opportunity Housing” task force that will explore allowing up to four units per parcel in residential zones – a significant increase given that approximately 94% of San Jose residential land is designated for single-family housing and only 6% for multifamily. In San Francisco, Supervisor Mandelman has introduced legislation to allow fourplexes on corner lots and other traditional single-family neighborhoods within a half-mile of major transit stops. Most recently, the City of Berkeley unanimously adopted a resolution to begin the process of eliminating single-family residential zoning and allowing for other types of housing such as apartments, duplexes and triplexes in the next few years. Berkeley is also considering legislation that would legalize quadplexes throughout the city. The City of South San Francisco is also beginning to explore the issue.

    These efforts to reassess traditional single-family zoning reflect a crossroads for local jurisdictions grappling with competing pressures to retain local control over land use decisions, and address inequitable access to housing, the effects of climate change, and the economic fallout from COVID-19. Taken together, these local proposals would result in more modest increases in residential density compared to proposed state legislation such as SB 10 and similar prior failed bills, but they reflect a growing effort to take on the issue directly at the local level, particularly within transit-rich jurisdictions.

    The Coblentz Real Estate team continues to track the progress of these state-wide and local efforts. Please contact a member of our team for additional information and any questions related to the impact of these pending state and local regulations on land use and real estate development.

  • The Corporate Transparency Act (CTA) Requires Companies to Disclose Beneficial Owners

    By Jennifer Leung

    On January 1, 2021, Congress passed the Corporate Transparency Act (CTA) as part of the 2021 National Defense Authorization Act. The CTA requires most private companies formed in the U.S. or registered to do business in the U.S. to report beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN) bureau of the U.S. Department of the Treasury. Although the CTA is intended to eliminate the anonymity of individuals that use shell companies for illegal activities, the reporting requirements will affect legitimate private companies. Companies should be aware of and prepare for the new reporting requirements to avoid civil and criminal penalties for failure to file the information when required.

    Types of Companies Required to Report Beneficial Owners Under the CTA

    Companies that are required to report their beneficial owners and applicants to FinCEN under the CTA are any corporation, limited liability company, or other similar entity that is either formed in the U.S. or formed under the law of a foreign country and registered to do business in the US. Certain companies are exempt from the reporting requirements, including:

    • publicly-traded companies;
    • banks, insurance companies, investment companies registered with the Securities Exchange Commission, and credit unions;
    • public accounting firms;
    • companies that employ more than twenty people, filed a tax return reporting gross receipts of more than $5 million, and have a physical presence in the US;
    • nonprofit organizations; and
    • any entity that is designated by Secretary of the Treasury to be exempt.

    It is unclear whether the scope of “other similar entity” under the CTA will include partnerships (general or limited) or trusts until the regulations under the CTA have been adopted. The CTA regulations would be consistent with existing FinCEN’s customer due diligence rules if it includes limited partnerships and business trusts but excludes general partnerships and most estate planning trusts.

    CTA Reporting Requirements

    Reporting will not begin until the Secretary of the Treasury has adopted regulations detailing how the CTA will be implemented, which adoption is mandated by January 1, 2022.

    FinCEN must also establish a registry to collect the identifying information on a reporting company’s beneficial owners and applicants. Reporting companies must file a report with FinCEN upon formation or registration, containing the following information regarding its beneficial owners and applicants:

    • full legal name;
    • date of birth;
    • current residential or business address; and
    • unique identifying number from an acceptable identification document, such as a driver’s license or passport.

    Companies formed before the regulations are adopted will have a two-year period after adoption of the regulations to file their initial reports.

    Companies will also be required to submit annual reports to reflect any changes to the identifying information.

    Definitions of Beneficial Owner and Applicants

    A “beneficial owner” is defined as an individual who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise owns or controls 25% or more of the ownership interest of an entity, or exercises “substantial control” over an entity.

    The CTA does not define “substantial control.” The regulations will likely contain complex rules for measuring ownership and determining who is in control, as well as how to treat multi-tiered companies and related parties.

    The five exclusions from the definition of a beneficial owner include:

    1. minor children, if the child’s parent’s or guardian’s information is reported properly;
    2. individuals acting as a nominee, intermediary, custodian, or agent on behalf of another individual;
    3. an individual acting solely as an employee;
    4. an individual whose interest in an entity is only through a right of inheritance; or
    5. a creditor of a reporting person, if the creditor is itself not a “beneficial owner” based on substantial control or ownership or control of 25% or more of the ownership interests in the reporting company.

    An “applicant” means any individual who files an application to form a reporting company or registers or files an application to register a reporting company to do business in the United States. This requirement is noteworthy because a reporting company would need to file identifying information for the individual who files the application to form the company even if that individual is not a beneficial owner. This could conceivably include individuals at law firms that act as agents to create the company.

    Confidentiality of Identifying Information

    FinCEN will hold the information that is gathered on beneficial owners and applicants in a confidential and secure database. Information will only be released in response to a request from law enforcement agencies engaged in national security, intelligence, or law enforcement activity, and if the reporting company consents, financial institutions subject to and in order to comply with customer due diligence requirements.


    Companies or individuals who violate the CTA will be subject to civil penalties of not more than $500 per day, capped at $10,000, and imprisonment of up to two years if an individual willfully provides false information or fails to report.

    Interim Planning Recommendations

    Until the Secretary of the Treasury has adopted regulations, companies should assume that not only corporations and LLCs, but partnerships, trusts, and other entities, will be covered by the CTA.

    Management of reporting companies should assess the requirements of the CTA, and determine whether their company’s operative documents should include:

    • a representation by each shareholder, member or partner, as applicable, that it will be in compliance with or exempt from the CTA;
    • a covenant by each shareholder, member or partner, as applicable, requiring continued compliance with and disclosure under the CTA or to provide evidence of exemption from its requirements;
    • an indemnification by each shareholder, member or partner, as applicable, to the company and its other shareholders, members or partners, as applicable, for its failure to comply with the CTA or for providing false information; and
    • a consent by each disclosing party for the company to disclose identifying information to FinCEN, to the extent required by law.

    Investment funds should consider adding similar representations and covenants by their investors to their subscription and management agreements. Lenders should also consider adding similar representations and covenants by their borrowers to their loan documents.

    For questions, or to further discuss how to prepare your business to comply with the Corporate Transparency Act, please contact Jennifer Leung at jleung@coblentzlaw.comSara Finigan at sfinigan@coblentzlaw.com, or any of the Coblentz Corporate team.

  • Prominent Land Use Lawyer Frank Petrilli Joins Coblentz Patch Duffy & Bass

    San Francisco-based law firm Coblentz Patch Duffy & Bass LLP is pleased to welcome Frank Petrilli to the firm’s partnership. Frank joins Coblentz from Arent Fox.

    Frank Petrilli is a trusted advisor to his clients on all matters related to entitlement strategy, land use and land use litigation, and compliance under the California Environmental Quality Act (CEQA). His recent projects include advising on Facebook’s headquarters expansion in Menlo Park, as well as working closely with Facebook’s public policy team in connection with its $1 billion housing investment in California; advising Kylli in connection with the Burlingame Point office campus project; as well as advising on a number of prominent multifamily, mixed-use, hospitality, office and life science projects throughout the Bay Area.

    “We’re thrilled to welcome Frank to Coblentz,” said Matt Bove, partner and chair of Coblentz’s real estate and land use practice. “His geographic focus on the Mid-Peninsula, Silicon Valley and Santa Cruz enhances our team’s existing depth and breadth of expertise in these areas, and his particular experience with complex entitlement matters makes him a great addition to our deep bench of top-notch land use attorneys.”

    Frank serves on the Board of Directors of the San Mateo County Economic Development Association (SAMCEDA) and the Bay Area Council. In 2020, he was named among the “Top 40 Under 40” attorneys in California by the Daily Journal and is a Legal 500 recommended Land Use & Zoning attorney (2017-2020), as well as a “Northern California Rising Star” by Super Lawyers every year since 2016.

    “I was attracted to Coblentz by the depth and quality of the land use practice, as well as the firm’s collaborative culture, its values, and, of course, its people. My clients will undoubtedly benefit from having access to such a talented and committed team of lawyers,” said Frank Petrilli. “I am thrilled and privileged to join what I truly believe is the strongest real estate and land use practice in California.”

    Coblentz’s real estate and land use practice has guided some of the largest commercial and residential development projects and transactions in California. These projects vary from major sports arenas including the San Francisco Giants’ Oracle® Park, San Francisco 49ers’ Levi’s® Stadium and the LA Clippers’ arena in Inglewood to major neighborhood-transforming projects such as the $1 billion 5M Project (one of the largest mixed-use projects in San Francisco), Catellus Development Corporation’s 300-acre Mission Bay project, redevelopment of the Vallco shopping mall in Cupertino (the first mixed-use, mixed-income project in the state to successfully use SB 35), and the 154-acre Napa Pipe residential redevelopment project in Napa County. Also included among our notable representations are renowned cultural institutions such as the California Academy of Sciences and the Exploratorium, world-class health care campuses including Sutter Health/California Pacific Medical Center hospital rebuilding projects in San Francisco and John Muir Health facilities throughout the East Bay, and the largest land use and conservation project in California history at Tejon Ranch. The Coblentz Real Estate and Land Use group is top ranked in Chambers USA and Legal 500 USA, and our attorneys and projects are continuously awarded by The Best Lawyers in America, The Daily Journal, and the San Francisco Business Times, among others.

    The firm’s Unfamiliar Terrain blog provides insights into the complex Bay Area land use landscape.


    About Coblentz Patch Duffy & Bass LLP

    Coblentz Patch Duffy & Bass LLP is a premier provider of innovative, results-oriented legal services, specializing in real estate, litigation, business, employment, tax and family wealth. U.S. News & World Report recognizes Coblentz as one of the nation’s top law firms in the Best Law Firm list, with national and local rankings in 16 practice areas and six prestigious “Tier 1” rankings in the highly competitive San Francisco law firm category. Law360 named Coblentz a California Powerhouse firm. The National Law Journal named Coblentz to its prestigious, nationwide Midsize Hot List four times.  For more information: www.coblentzlaw.com.

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