On March 16, 2020, the Bay Area issued shelter-in-place (SIP) orders to slow the spread of the novel coronavirus, with the entire state of California quickly following suit on March 19. With the exception of essential workers, day-to-day business practices had to shift dramatically including how we conduct public hearings. How do you hold a public hearing if the public and parties involved cannot be in the same place?

Guidance was provided in Governor Newsom’s Executive Order N-29-20 (amending Executive Order N-25-20 in part), which authorized legislative bodies to hold public meetings via teleconferencing (Zoom, GoToMeeting, Skype, etc.). In this order, all requirements of the Brown Act expressly or impliedly requiring the physical presence of a member, the clerk or other personnel of the body or of the public as a condition of participation in or quorum for a public meeting are waived. Meetings via teleconference that allows members of the public to observe and address the meeting by telephone or otherwise electronically, consistent with notice and accessibility requirements, satisfy the requirement that a member of the public must attend the meeting and offer public comment.

However convenient this work around is, there are legal issues that arise relating to due process concerns regarding this order.

The Order Only Refers to “Public Meetings” and Not “Public Hearings”

While the order specifically authorizes public meetings, it does not preclude local agencies from holding public hearings on issues within the local agencies’ purview. The Brown Act discusses hearings being held at “meetings,” so the order does not appear to exclude public hearings.

The Brown Act defines “meetings” as “any congregation of a majority of the members of a legislative body at the same time and location, including teleconference location as permitted by Section 54953, to hear, discuss, deliberate, or take action on any item that is within the subject matter jurisdiction of the legislative body.” (Gov. Code, § 54952.2.)

While there is no corresponding definition of “hearing” in the Act, and “hearing” is rarely used throughout, there is nothing in the Act  that indicates a “hearing” may not be part of a meeting.   See for example Government Code S54955.1 referring to continuances which says: “Any hearing being held, or noticed or ordered to be held, by a legislative body of a local agency at any meeting may by order or notice of continuance be continued or recontinued to any subsequent meeting of the legislative body …” (Gov. Code, § 54955.1.). According to one Court of Appeal decision, “[a] ‘hearing’ is ‘[a] proceeding of relative formality … generally public, with definite issues of fact or of law to be tried, in which witnesses are heard and evidence presented. (Blacks Law Dict. (6th ed.1990) p. 721, col. 1.).” (Bollinger v. San Diego Civil Service Com. (1999) 71 Cal.App.4th 568, 574.)

Given the above, Order N-29-20 does not prevent local agencies from holding “hearings” as a part of their meetings that rely on the provisions of the Order. Local agencies should “use sound discretion and make efforts to adhere as closely as reasonably possible to the requirements of the Brown Act in order to maximize transparency and provide public access to meetings.” As such, public hearings are permitted under Order N-29-20.

Can Zoom/YouTube or Alternate Forms of Remote Access Ensure “Due Process”?

Article I, Section 3 (b)(7) of the California Constitution states that, in order to ensure public access to the meetings of public bodies and the writings of public officials and agencies, each local agency is required to comply with the California Public Records Act (commencing with Government Code Section 6250 and the Ralph M. Brown (Government Code Section 54950).

Procedural “due process” is generally defined to require notice and an opportunity to be heard. Therefore, remote access appears to allow for due process so long as the agency provides notice of the public meeting (e.g., posting on the local agency’s website) and an opportunity for comments by interested parties to be heard and considered by public officials during the virtual meeting.

What About Those Without Access to the Required Technology?

All website postings should provide extremely specific instructions on how to access the necessary technology or platforms being used, including details if a download is required. Issues arise when considering those without access to a computer. With public libraries closed due to SIP, members of the public may not have access to public computers. This could result in valid due process challenge inasmuch as members of the public may not have notice of the hearing and may, therefore, not have the opportunity to address the hearing body. Further, individuals who aren’t as tech-savvy may also contend that their efforts to participate in a meaningful way in the hearing were thwarted.

Local agencies should, therefore, continue to post notice of hearings in newspapers and send formal notice of hearings to those who have indicated an interest in the issue (interested party list) to ensure notice has been provided. We have seen a variety of approaches in these last few weeks with more agencies holding remote hearings. Some require members of the public to submit comments in writing in advance of the meeting which are then read into the record (often up to a time limit such as three minutes), and/or limiting the number of words in a public comment read into the record.

These are unprecedented times, and the ways in which public agencies are adapting may have long-term effects on the future of the conduct of public hearings. How courts would respond to a due process objection, given the challenges facing public agencies to continue to hold public hearings without in-person attendance, and how deferential they will be to an agency’s best efforts in light of Governor Newsom’s order, is unknown. Following the relief from SIP orders, we believe there may be greater reliance upon remote hearings and meetings particularly for regional meetings where public officials must travel great distances to attend, as well as meetings that typically draw large numbers of public participants, so continued refinement of both notice procedures and the process of allowing different methods of presenting public comment will be important.

On April 29, 2020, seven Bay Area public health officers began to issue substantially-similar updated Shelter-in-Place orders (“April 29 SIP Orders”) which become effective at 11:59 p.m. on May 3, 2020, and reclassify all “Construction,” as “Essential Businesses,” which may resume operation beginning on May 4, subject to incorporation of applicable safety and social-distancing protocols.

The April 29 SIP Orders extend the current shelter-in-place through May 31, 2020 in the counties of Alameda, Contra Costa, Marin, San Francisco, San Mateo, Santa Clara, and the City of Berkeley, but lift the significant restrictions on construction put in place by the previous Bay Area SIP Orders which limited construction to residential projects that included at least 10% income-restricted units on site. Since the original SIP orders were issued, state and local legislators, labor unions, the building industry, and local and regional economic groups all questioned the limit on certain construction projects and urged local Bay Area health officials to allow all construction in light of the industry’s ability to abide by safety and social-distancing protocols.

The applicable language regarding permitted construction from Alameda County’s April 29 SIP Order, as an example, provides:

a. For the purposes of this Order, individuals may leave their residence only to perform the following “Essential Activities.” . . . Essential Activities are: . . .

iv. To perform work for or access an Essential Business, Outdoor Business, or to otherwise carry out activities specifically permitted in this Order, including Minimum Basic Operations, as defined in this Section.

f. For the purposes of this Order, “Essential Businesses” are: . . .

v. Construction, but only as permitted under the [March 19] State Shelter Order and only pursuant to the Construction Safety Protocols listed in Appendix B and incorporated into this Order by this reference. Public works projects shall also be subject to Appendix B, except if other protocols are specified by the Health Officer . . .

No distinction is made between residential, commercial, or affordable housing construction in the April 29 SIP Orders, so all projects may resume on May 4 if they abide by the updated rules. Moreover, the referenced State Shelter Order does not place any specific restrictions on the resumption of construction in the state, and, in fact, the State Director of Public Health deemed “Construction Workers who support the construction, operation, inspection, and maintenance of construction sites and construction projects (including housing, commercial, and mixed-use construction)” as Essential Workforce during this crisis.

However, construction is only permitted to resume in the affected areas if the construction projects incorporate specific Construction Safety Protocols, as attached to the April 29 SIP Orders, with some distinctions based on project size. A copy of those Construction Safety Protocols, as provided in Alameda County’s order, can be found at this link.

Wendel Rosen LLP will update this post as further related orders are issued, and our attorneys are available to answer any questions you may have regarding these orders.

Sixteen State legislators from the greater Bay Area took issue with the residential construction limitations contained in the March 31 shelter-in-place order issued by six County (and the City of Berkeley) public health officers (“Health Officers’ Order”). Alameda County’s order, which is substantively identical to other counties’ orders, is available here: No. 20-04.

In a letter dated April 16 (“Legislators’ Letter), the legislators urged the health officers to consider changing their limitation on residential construction projects containing at least 10% “income-restricted” units, so as to avoid “arbitrary choices” relative to which project can continue. Signatories of the letter included housing advocates such as Senators Scott Weiner and Nancy Skinner, along with Assembly members Buffy Wicks, Rob Bonta and David Chiu. A copy of the Legislators’ Letter is available here.

The legislators premised their letter on the policy that housing construction is an essential service given the State’s severe housing shortage and proposed that the Health Officers’ Order should “mirror the state and federal approach to housing – broadly classifying housing construction as an essential activity and avoiding arbitrary choices that certain housing can be built while others cannot.”

It is notable that the Health Officers’ Order does not contain any explanation or justification for how the health officials arrived at the 10% income-restricted figure. Virtually all residential projects under construction in the Bay Area will either include some percentage of affordable units, or will have paid an affordable housing fee used to build affordable units off-site. Projects that are under construction (and projects with certain types of entitlements) have a vested right to continue free of additional local regulation, but such vested rights can be interrupted in the case of a public health emergency. The issue here is not the emergency declaration (or the requirement that workers adhere to social distancing and other safety protocols), but the seemingly arbitrary line drawn by the public health officers.

The Legislators’ Letter indicated that their views, while their own, also were “generally consistent” with those expressed by elected officials throughout the region. Citing the society-wide negative impacts from the lack of housing and recent legislative efforts to address the shortage, the Legislators’ Letter cautioned the need to “ensure that we don’t, in the name of public health, create both short term and long term unintended health problems for our community due to over-crowding and long auto commutes.”

The Legislators’ Letter criticized the 10% affordability requirement as placing a “serious and potentially irreversible roadblock to essential housing construction, including projects that help meet our affordable housing needs, projects that serve students and seniors, and projects that have their permits and that may already be under construction and even very close to completion.”

While the legislators urged the health officers to adopt the broader state and federal approach to new residential construction, they offered other recommendations in the event that the health officers were unwilling to go that far. The Legislators’ Letter included the following fallback recommendations:

1. Housing should be allowed if at least 10% of the units are below market rate, whether constructed on-site, off-site or via a fee paid to fund other affordable housing;
2. Housing projects should be allowed if they produce at least 20 units of affordable housing regardless of the percentage;
3. Student housing and senior housing should be allowed to proceed; and
4. Housing that is mostly complete should be allowed to be finished.

As we noted in prior posts, eight Bay Area Building Trades Councils issued their own letter on April 14 to the Alameda County Board of Supervisors, taking issue with the Health Officers’ Order’s limitation on residential construction. (The Trades Councils sent similar letters to other Bay Area county supervisors.) The Trades Councils’ letter pointed out the industry’s conformance to COVID-19 safety protocols and urged the County to “immediately exempt all housing from the [County] Order.” The Trades Councils noted that (1) development of all housing, especially high-density residential housing, was needed to address the area’s acute housing shortage, (2) many jurisdictions address affordable housing needs through the payment of in-lieu fees that rely on construction of market-rate units, and (3) the construction employee and contractor base could be decimated for years, as occurred during the housing crash in the late 2000s, leading to higher costs and greater shortages.

The Building Trades Councils’ letter to the Alameda County Board of Supervisors can be found here.

We are continuing to work with local officials and will be happy to answer specific questions.

On April 16, 2020 the Small Business Administration (SBA)  announced that it ran out of funding to process any more small business loans through the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Program (EIDL) that were created under the CARES Act. While additional funding is being negotiated, small businesses are looking elsewhere to keep afloat.

Facebook is offering $100M in cash grants and ad credits to help small businesses experiencing disruptions resulting from the global outbreak of COVID-19. Applications are now open for New York City, Seattle and the San Francisco Bay Area[1].

To be eligible for a Facebook grant, an applicant must: (i) be a for-profit company, (ii) have between 2 and 50 employees, (iii) have been in business for over a year, (iv) have experienced challenges from COVID-19, and (v) be in or near a location where Facebook operates.

As part of the application, the applicant must explain how it will use grant funds to make an impact on its business or the community (examples include: keeping a workforce going strong, helping with rent costs, connecting with more customers, and covering operational costs).

Click here for details about the Facebook Small Business Grants Program.

[1] Applications for all other eligible US cities will be available on April 22, 2020.

On April 7, the City of Oakland Planning and Building Department released findings and determinations implementing the construction-related section 13(f)(v) of the County of Alameda’s March 31 shelter-in-place order No. 20-04 (“County Order”). The County Order allows residential construction projects to continue only if a project’s units include at least 10% that will become “income-restricted.” Oakland’s April 7 Implementation Statement interpreted this requirement broadly and stated that the City would allow construction, and perform building inspection services, for residential construction that is “compliant with the City’s affordable housing requirements,” including, but not limited to, projects required to pay the Affordable Housing Impact Fee in lieu of constructing on-site affordable units.

On April 14, the Alameda County Health Officer objected to the City’s decision to allow construction to continue on residential projects that satisfied affordable housing obligations through the payment of in-lieu fees. In a letter to the City, the Health Officer found the City’s interpretation to be “inconsistent with both the spirit and the letter of the Order, which prioritizes construction of affordable-housing units over other construction.” The Health Officer warned that “because the [County] Order controls over any other authorization, those following [the City’s] interpretation are at risk of arrest and the imposition of fines.”  (Note that the City of Berkeley has its own Department of Public Health and issued its own shelter-in-place order that conforms to those issued by other Bay Area counties.)

The City removed its April 7 Implementation Statement from its website and modified its response to the County Order to reflect that exempted construction pertaining to affordable housing must have 10% affordable units on-site. The City’s updated response to the County’s Order can be found at https://www.oaklandca.gov/news/2020/planning-building-department-response-to-shelter-in-place.

While not in direct response to the Health Officer letter to Oakland, eight Bay Area Building Trades Councils issued their own letter on April 14 to the Alameda County Board of Supervisors, taking issue with the County Order’s limitation on residential construction to those projects including 10% income-restricted units.  The Trades Council letter pointed out the industry’s conformance to COVID-19 safety protocols and urged the County to “immediately exempt all housing from the [County] Order,” not just those with 10% or more income-restricted units.  The Trades Council noted that (1) development of all housing, especially high-density residential housing, was needed to address the area’s acute housing shortage, (2) many jurisdictions address affordable housing needs through the payment of in-lieu fees that rely on construction of market-rate units, and (3) the construction employee and contractor base could be decimated for years, as occurred during the housing crash in the late 2000s, leading to higher costs and greater shortages.

The Health Officer letter did not take issue with other aspects of the City of Oakland’s Implementation Statement.  The City will also allow construction and will continue building inspection services for construction necessary to stabilize the soil, structure, or water management for non-exempt projects in the process of shutting down in compliance with County Order No. 20-04. However, this construction is only permitted to continue for a maximum of one week without additional plan approval by the City. The City will also allow and will proceed with building inspection services for three other types of construction: construction that had already initiated a temporary certificate of occupancy process as of March 31 (such construction may complete the process to obtain a Certificate of Occupancy); construction and repair of buildings containing “Essential Businesses” as defined in County Order No. 20-04; and construction and repair necessary to ensure the ongoing habitability and safety of residences or living spaces.

The City’s Implementation Statement findings reiterated that any ongoing construction work, however, must comply with all aspects of County Order No. 20-04, including the immediate preparation and posting of a “Social Distancing Protocol” for each facility frequented by the public or employees. Finally, the City’s findings encourage all construction sites to implement the social distancing guidance from the State Building & Construction Trades Council found here.

The County Health Officer’s letter to the City can be found here.

The Building Trades Council letter to the Alameda County Board of Supervisors can be found here.

The City’s original, and now superseded, April 7 Implementation Statement can be found here.

We are continuing to work with local officials and will be happy to answer specific questions.

On April 7^th, the City of Oakland released findings and determinations implementing the construction-related section 13(f)(v) of the County of Alameda’s March 31^st shelter-in-place order No. 20-04. Specifically, during the shelter-in-place, the City’s Planning and Building Department will allow construction and will proceed with building inspection services for residential construction which is “compliant with the City’s affordable housing requirements,” including, but not limited to, those projects required to pay the Affordable Housing Impact Fee in lieu of constructing on-site affordable units.

The City will also allow construction and will continue building inspection services for construction necessary to stabilize the soil, structure, or water management for non-exempt projects in the process of shutting down in compliance with County Order No. 20-04. However, this construction is only permitted to continue for a maximum of one week without additional plan approval by the City.

The City will also allow and will proceed with building inspection services for three other types of construction: construction that had already initiated a temporary certificate of occupancy process as of March 31^st (such construction may complete the process to obtain a Certificate of Occupancy); construction and repair of buildings containing “Essential Businesses” as defined in County Order No. 20-04; and construction and repair necessary to ensure the ongoing habitability and safety of residences or living spaces.

The City’s implementation findings reiterate that any ongoing construction work, however, must comply with all aspects of County Order No. 20-04, including the immediate preparation and posting of a “Social Distancing Protocol” for each facility frequented by the public or employees. Finally, the City’s findings encourage all construction sites to implement the social distancing guidance from the State Building & Construction Trades Council found here.

The City’s construction guidance can be found at https://www.oaklandca.gov/news/2020/planning-building-department-response-to-shelter-in-place.

Wendel Rosen attorneys continue to work with City officials and will be happy to answer specific questions.

Wendel Rosen’s Real Estate Litigation Group knows real estate. Led by Chuck Hansen, who has for decades been recognized as one of California’s foremost real property experts, our team has the expertise and experience necessary to help clients resolve virtually any real estate problem arising from the COVID-19 crisis, including matters relating to purchase and sales transactions, real estate secured financing, commercial leases, title and escrow, and more. If you have a real estate problem, we can help you resolve it.

Commercial Lease Matters

With many businesses closing or severely curtailing operations under “Shelter in Place” Orders, COVID-19 has created an unprecedented crisis for commercial landlords and tenants. Our attorneys are available to guide clients through the maze of business and legal issues now confronting commercial landlords and tenants, including:

• Whether governmental closure orders, or related circumstances, excuse or otherwise limit the tenant’s obligation to pay rent under doctrines such as force majeure, impossibility, and frustration of purpose.
• Potential landlord remedies and constructive strategies for approaching and resolving disputes over the tenant’s rental obligations, including forbearance, deferral, and lease extensions.
• Whether loan documents restrict the landlord’s ability to negotiate tenant accommodations or otherwise impact the landlord’s approach.
• Negotiating temporary accommodations without effecting a broader waiver of rights.
• Early surrender or termination of the lease and the landlord’s duty (if any) to mitigate damages.
• The scope and impact of governmental and judicial restrictions and moratoria on evictions.

Mortgage/Trust Deed Financing

With the COVID-19 crisis cutting many property owners’ cash flows, a wave of defaults may well be on the horizon. Wendel Rosen is a recognized leader in the area of real-estate secured financing. Our attorneys have decades of experience helping clients negotiate the maze of California law governing mortgage and trust deed financing, and stand ready to offer advice and representation on current issues, including:

• Loan defaults resulting from governmental closure orders or related circumstances: Strategies and tactics for dealing with default, including negotiated forbearance or loan forgiveness.
• Government-imposed foreclosure moratoria: Applicability and impact in particular cases.
• Court closures and judicial and non-judicial foreclosures: Is judicial relief available, and if not, what are the consequences and potential workarounds?
• Novel foreclosure auction issues, including:
• Compliance with statutory requirements in light of “Social Distancing” orders.
• Bidding strategies in a time of profound market uncertainty.
• “Fair Value” anti-deficiency protections in a broken market place.
• Guarantor liability for COVID-19 related loan defaults.

Purchase and Sale Transactions

The COVID-19 crisis will impact many real estate transactions that were pending prior to issuance of “Shelter in Place” orders and related events. Likewise, the crisis creates an entirely new set of issues for sellers and buyers of real property. Issues we can assist with include:

• Nonperformance and/or rescission under theories of nondisclosure, force majeure, impossibility, and frustration of purpose.
• Buyer efforts to renegotiate terms based on changed circumstances.
• Inspections and contingencies in a time of pandemic.
• The risks of selling and buying based on virtual inspections (and how to mitigate those risks).
• The impact of Shelter in Place and Social Distancing on real estate closings.
• Then things go wrong: The availability of judicial remedies in light of court closures.
• Alternative or “self-help” remedies – strategies and tactics for resolving problems creatively.

Title, Title Insurance, and Escrows

While escrow and title companies are in some instances exempted from “Shelter in Place” orders as essential businesses, the COVID-19 crisis raises a host of issues relative to title, title insurance, and escrow, including:

• Online title searches – advantages and limitations.
• Escrow holdbacks: Creative solutions to new problems.
• Increased cybercrime risk in “All Remote” escrows. Potential liabilities, and how to mitigate them.
• The impact of COVID-19 on title insurance claims handling and claim handling time limits.
• Arbitration as an alternative in an era of court closures and increasing backlogs.

Land Use and Development

As local governments and courts continue to adapt to Shelter in Place orders, our lawyers are prepared to assist processing land use entitlement applications from start to finish, and to engage in litigation where necessary to achieve client goals. Issues unique to the COVID-19 crisis include the following:

• Working with local government officials to ensure entitlement processing is moving forward.
• Appearing at virtual public hearings and navigating due process issues.
• Addressing issues relating to interpretation of local government orders regarding continuation of construction.
• Assisting clients with extending existing entitlements impacted by Shelter in Place orders.
• Filing and defending land use litigation disputes.

Contact Us

To learn more about our capabilities and attorneys, visit the Real Estate Litigation page.

On March 31, 2020, the public health officers of Alameda County, Contra Costa, Marin, San Francisco, San Mateo and Santa Clara counties released a revised Shelter in Place Order (the “March 31 SIP Order”). The March 31 SIP Order takes effect at 11:59 p.m. on March 31 and will continue to be in effect until 11:59 p.m. on May 3, 2020, or until it is extended, rescinded, superseded, or amended. The March 31 SIP Order supersedes Alameda’s initial March 17, 2020 order and is intended to ensure the maximum number of people shelter in their places of residence, while allowing essential services and activities to continue, but severely restricting all non-essential activities, in order to slow the spread of COVID-19. As of March 18, 2020, eleven Bay Area and neighboring counties issued SIP orders, including the six counties covered by the March 31 SIP order, Monterey, Santa Cruz, and Sonoma counties. Each county issued its own order, but they are nearly identical in content. However, Napa County has taken its own path, recently amending its Shelter at Home order. In its updated April 22 order, Napa includes in the definition of “Essential Businesses” all “[w]orkers who support the construction, operation, inspection, and maintenance of construction sites and construction projects (including housing construction), including but not limited to surveyors and workers conducting site investigations.” The Napa order expressly permits these construction workers to leave their residences to work on construction projects, subject to social distancing requirements, and does not distinguish between residential projects (with or without affordable housing) and commercial projects.

While the March 31 SIP Order sets forth a variety of measures meant to protect the health and safety of county residents, including requiring individuals to remain in their homes except for “essential” activities and businesses, it also has practical implications for current and future development and construction in the affected counties.

According to section 13(a)(iv) of the March 31 SIP Order, individuals may leave their residences to perform work for an “Essential Business.” Among several other categories, “Essential Businesses” include only specific types of “Construction,” namely:

1. 1. Projects immediately necessary to the maintenance, operation, or repair of Essential Infrastructure;
   2. Projects associated with Healthcare Operations, including creating or expanding Healthcare Operations, provided that such construction is directly related to the COVID-19 response;
   3. Affordable housing that is or will be income-restricted, including multi-unit or mixed-use developments containing at least 10% income-restricted units;
   4. Public works projects if specifically designated as an Essential Governmental Function by the lead governmental agency;
   5. Shelters and temporary housing, but not including hotels or motels;
   6. Projects immediately necessary to provide critical non-commercial services to individuals experiencing homelessness, elderly persons, persons who are economically disadvantaged, and persons with special needs;
   7. Construction necessary to ensure that existing construction sites that must be shut down under this Order are left in a safe and secure manner, but only to the extent necessary to do so; and
   8. Construction or repair necessary to ensure that residences and buildings containing Essential Businesses are safe, sanitary, or habitable to the extent such construction or repair cannot reasonably be delayed. (March 31 SIP Order at Section 13(f)(v).)

While Essential Businesses, including those exempted types of Construction set forth above, are “strongly encouraged to remain open” per the March 31 SIP Order, all “Essential Businesses are directed to maximize the number of employees who work from home” and “may only assign those employees who cannot perform their job duties from home to work outside the home.” Furthermore, all “Essential Businesses” are now required to “prepare, post, and implement a Social Distancing Protocol at each of their facilities at which they are maintaining operations,” as set forth in section 13(h) of the March 31 SIP Order.

It is arguable that permitting, inspection, and other services are also “necessary” for “Construction” and therefore exempt, including plan checks, issuance of building and grading permits, inspections for permits and certificates of occupancy, utility hook-ups, and recordation of necessary documents such as mechanics liens, tax liens, easements, financing instruments, covenants, conditions and restrictions, and title transfers. The definition of “Essential Businesses” also includes “Service providers that enable residential transactions (including rentals, leases, and home sales), including, but not limited to, real estate agents, escrow agents, notaries, and title companies, provided that appointments and other residential viewings must only occur virtually or, if a virtual viewing is not feasible, by appointment with no more than two visitors at a time residing within the same household or living unit and one individual showing the unit (except that in person visits are not allowed when the occupant is still residing in the residence).” (March 31 SIP Order at Section 13(f)(x).) Professional services, such as legal, notary, or accounting services, when necessary to assist in compliance with non-elective, legally required activities, are also considered “Essential Businesses.” (Section 13(f)(xxiv).)

Regardless, under the initial and the March 31 SIP Orders, all the these services must comply with social distancing policies, including maintaining a six-foot distance from other individuals, to the extent possible. On March 19^th, Governor Gavin Newsom issued a statewide order requiring all Californians to remain in their homes, except as needed to “maintain continuity of operations of [16 identified] federal critical infrastructure sectors.” These sectors do not specifically identify residential or commercial development project workers as critical, unless their work directly supports the emergency response. Further guidance regarding these critical sectors can be found here. The Governor’s order remains in place until further notice. The March 31 SIP Order acknowledges that it “adopts in certain respects more stringent restrictions addressing the particular facts and circumstances in [the respective county], which are necessary to control the public health emergency as it is evolving within the County and the Bay Area. Where a conflict exists between this Order and any state public health order related to the COVID-19 pandemic, the most restrictive provision controls.” (Section 12.)

In any event, developers can likely expect delays in the processing of land use entitlements, including zoning applications, building permit applications, and inspections unless the project involves one of the Construction types considered an “Essential Business” as listed above. The City of Oakland, for example, as of March 17, closed its Planning and Building counters to the public until further notice, including its permit counters. Oakland Planning and Building has since clarified the scope of this closure on its website. Specifically, the department will prioritize the following: “housing projects, particularly affordable housing projects and mixed-use projects that include housing; emergency repairs; continuing review of existing projects already submitted to the city; [and] other inspections as resources and time allow.”

However, developers should check with their local jurisdiction regarding the effect on government services as this is a rapidly evolving situation and different jurisdictions are approaching it in a variety of ways. Applicants also might find that planning desks, to the extent they are open, are not accepting new planning applications for non-residential development, so as to avoid conflicts with deadlines set forth under the Permit Streamlining Act. Presumably agency staff will continue processing existing applications to meet applicable deadlines, though the SIP Order could be interpreted to disallow this activity, thereby creating tension with state law.

Although under the March 31 SIP Order, individuals may only leave their residences to perform Essential Activities, such as those activities related to health or medical care, grocery shopping, or to care for family members, there is no prohibition against performing or accessing “Essential Governmental Functions,” per section 13(d). The Alameda County SIP Order does not define “Essential Governmental Functions,” but allows the governmental entity performing those functions to determine which functions are essential. The City of Oakland has stated that it will maintain such Essential Governmental Functions in accordance with the SIP Order, but did not clearly provide which services, beyond first responders, it deems as “essential.” Oakland has closed its Civic Center buildings, including City Hall, to the public, except by special appointment or for attendance at public meetings (most of which have also been cancelled). Additionally, Oakland has stated that most of its public service counters have switched to online/phone/appointment access only, but no information is provided for the Planning and Building Department. In contrast, San Francisco County’s SIP order defines Essential Government Functions as services needed to ensure the continuing operation of the government and to provide for the health, safety, and welfare of the public. In all counties, Essential Governmental Functions shall also comply with social distancing restrictions.

Section 13(d) of the SIP Order gives great deference to local governments to define Essential Government Functions. As such, it is possible, if not very likely, that the processing of development applications will cease or greatly slow down. It is advisable to check with the local jurisdiction on processing times and related closures.

Additionally, in response to the Shelter-in-Place Orders, many of the local superior courts have closed or greatly reduced operations, and thus, on-going litigation related to development projects is likely to be delayed. Every court has unique rules regarding closures, status of hearings, and acceptance of filings. Furthermore, on April 6^th, the California Judicial Council issued an emergency rule of court tolling all statutes of limitation for civil actions in state courts from April 6, 2020 until 90 days after the statewide state of emergency is lifted. The relevant statutes of limitations would then begin running again from the date 90 days after the end of the state of emergency.

For reference, links to the eleven county Shelter-in-Place Orders can be found at the following links: Alameda, Contra Costa, Marin, Monterey, San Benito, San Francisco, Santa Clara, Santa Cruz, San Mateo, Sonoma, and Yolo. Napa County recently amended its March 20 “Shelter-at-Home” Order with a new order which took effect on Wednesday, April 22, and can be found here.

Separately, on March 12, Governor Newsom issued Executive Order N-25-20 (the “Executive Order”) which suspends provision of the Brown Act and Bagley-Keene Act to allow for greater flexibility to hold public meetings via telephone conference. The public is advised to check with the website of any relevant jurisdiction to determine if, and in what manner, a public meeting is being conducted.

Wendel Rosen LLP will update this post as further related orders are issued and our attorneys are available to answer any questions you may have regarding these orders.

Per new guidelines from the US Department of Labor, it appears that the DOL may be interpreting the new paid sick leave to apply only when the quarantine or isolation order is specific to the employee, not because a business is impacted by a shelter-in-place order. In other words, to trigger the new law, actual work must be available for the employee AND the employee must be unable to perform the work because of a quarantine/isolation order directed at the employee. Please note that the official regulations have not yet been published.

Examples Per New Interpretation

1. Local shelter-in-place order reduces business needs so much that receptionist is told to stay at home because there is not enough work for him. Employee is NOT entitled to federal paid sick leave.
2. Local shelter-in-place order exempts medical offices but receptionist has been told to stay at home by his doctor because he has been exposed to someone who tested positive for COVID-19. Employee IS entitled to federal paid sick leave.
3. Local shelter-in-place order exempts medical offices but receptionist has been told to stay at home by his doctor because he has scarlet fever. Employee is NOT entitled to federal paid sick leave.

What Does This Mean for Your Business?

The interpretation is uncertain and we are awaiting the official regulations to be published, but it is likely that:

1. Employers may have significantly less exposure for having to pay employees during state & local shelter-in-place orders;
2. Employers may need to manage their employees’ expectations as it is likely that employees will expect to be paid 80 hours if they are unable to work because of the local and state shelter-in-place orders; and
3. This will impact employers’ ability to claim tax credits.

Wendel Rosen will try to provide further clarification as more information becomes available from the Department of Labor, the CDC and possibly IRS in the next few days. In the meantime, everyone should be cautious about creating expectations concerning who will be entitled to the initial 80 hours of paid leave.

Questions?

Feel free to contact one of our employment attorneys: Tammy Brown (tbrown@wendel.com), Christine Noma (cnoma@wendel.com), or David Goldman (dgoldman@wendel.com).

Link to the DOL’s Guidance: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

Wendel Rosen LLP has updated this post. Visit Bay Area Counties’ Extended Shelter-In-Place Order Imposes Strict Limits on Development and Construction for the latest orders issued.

As of March 18, 2020, eleven Bay Area and neighboring counties have issued Shelter-in-Place orders, including Alameda, Contra Costa, Marin, Monterey, San Francisco, Santa Clara, Santa Cruz, San Mateo, and Sonoma counties. Each county issued its own order, but they are nearly identical in content. As an example, the Shelter-in-Place Order issued by Alameda County (the “SIP Order”), along with those of six other Bay Area counties, took effect at 12:01 a.m. on March 17, 2020 and continues until 11:59 p.m. on April 7, 2020, unless extended or rescinded. The issuance of the SIP Order is intended to ensure the maximum number of people self-isolate, while allowing essential services and activities to continue, in order to slow the spread of COVID-19. While the SIP Order sets forth a variety of measures meant to protect the health and safety of county residents, including requiring individuals to remain in their homes except for “essential” activities and businesses, it also has practical implications for current and future development and construction in the affected counties.

According to section 10(c) of the SIP Order, individuals may leave their residences to provide any services or perform any work necessary to the operations of maintenance of “Essential Infrastructure.” Essential Infrastructure includes, but is not limited to, “public works construction, construction of housing (in particular affordable housing or housing for individuals experiencing homelessness), airport operations, water, sewer, gas, electrical, oil refining, road and highways, public transportation, solid waste collection and removal, internet, and telecommunications systems.” It is arguable that permit, inspection and other services are also “necessary” to “the construction of housing” and therefore exempt, including plan checks, issuance of building and grading permits, inspections for permits and certificates of occupancy, utility hook-ups, and recordation of necessary documents such as mechanics liens, tax liens, easements, financing instruments, covenants, conditions and restrictions, and title transfers, but counties may see this differently and suspend these actions entirely. Regardless, under the SIP Order, all the these services must comply with social distancing policies, including maintaining a six-foot distance from other individuals, to the extent possible.

In any event, developers can likely expect delays in the processing of land use entitlements, including zoning applications, building permit applications, and inspections unless the project involves public works construction, the construction of housing (potentially including mixed use developments that include housing), or one of the other specific “Essential Infrastructure” activities listed above. The City of Oakland, for example, as of March 17^th, closed its Planning and Building counters until further notice, including its permit counters. However, developers should check with their local jurisdiction regarding the effect on government services as this is a rapidly evolving situation and different jurisdictions are approaching it in a variety of ways. Applicants also might find that planning desks, to the extent they are open, are not accepting new planning applications for non-residential development, so as to avoid conflicts with deadlines set forth under the Permit Streamlining Act. Presumably agency staff will continue processing existing applications to meet applicable deadlines, though the SIP Order could be interpreted to disallow this activity, thereby creating tension with state law.

Although under the SIP Order, individuals may only leave their residences to perform Essential Activities, such as those activities related to health or medical care, grocery shopping, or to care for family members, there is no prohibition against performing or accessing “Essential Governmental Functions,” per section 10(d). The Alameda County SIP Order does not define “Essential Governmental Functions,” but allows the governmental entity performing those functions to determine which functions are essential. The City of Oakland has stated that it will maintain such Essential Governmental Functions in accordance with the SIP Order, but did not clearly provide which services, beyond first responders, it deems as “essential.” Oakland has closed its Civic Center buildings, including City Hall, to the public, except by special appointment or for attendance at public meetings (most of which have also been cancelled). Additionally, Oakland has stated that most of its public service counters have switched to online/phone/appointment access only, but no information is provided for the Planning and Building Department. In contrast, San Francisco County’s SIP order defines Essential Government Functions as services needed to ensure the continuing operation of the government and to provide for the health, safety, and welfare of the public. In all counties, Essential Governmental Functions shall also comply with social distancing restrictions.

Section 10(d) of the SIP Order gives great deference to local governments to define Essential Government Functions. As such, it is possible, if not very likely, that the processing of development applications will cease or greatly slow down. It is advisable to check with the local jurisdiction on processing times and related closures.

Additionally, in response to the Shelter-in-Place Orders, many of the local superior courts have closed or greatly reduced operations, and thus, on-going litigation related to development projects is likely to be delayed, if not halted completely. For example, the Alameda County Superior Court has closed to the public and will not receive any non-emergency filings between March 17^th and April 3^rd. While the court considers these closure dates to be court holidays, it is likely that any statute of limitations’ filing deadlines will be extended just until Monday, April 7^th, unless the relevant court extends its closure beyond that date. Similarly, Contra Costa County Superior Court closed as of March 16^th and will remain closed until at least April 1^st. The court’s press release regarding this closure indicates that the closure will have the effect of being a public holiday, which we expect will extend statutory deadlines only until Thursday, April 2^nd, if the court reopens on that date.

For reference, links to the eleven county Shelter-in-Place Orders can be found at the following links: Alameda, Contra Costa, Marin, Monterey, San Benito, San Francisco, Santa Clara, Santa Cruz, San Mateo, Sonoma, and Yolo. Napa County recently issued a similar “Shelter-at-Home” Order which takes effect at midnight on Friday, March 20^th, and can be found here.

Separately, on March 12, 2020, Governor Newsom issued Executive Order N-25-20 (the “Executive Order”) which suspends provision of the Brown Act and Bagley-Keene Act to allow for greater flexibility to hold public meetings via telephone conference. The public is advised to check with the website of any relevant jurisdiction to determine if, and in what manner, a public meeting is being conducted.

Wendel Rosen LLP will update this post as further related orders are issued and our attorneys are available to answer any questions you may have regarding these orders.