Tenant Protections Continue To Impose Restrictions On Residential Landlords
Last fall, after mounting pressure from small landlords and others who have been adversely impacted by the eviction moratoriums, both the County and City of Los Angeles had signaled that they were unlikely to extend Covid-19-related protections for residential tenants. However, recent action by the Los Angeles County Board of Supervisors and Los Angeles City Council continue to hamper the ability of Los Angeles area landlords to evict residential tenants and to increase rent or other pass-through charges.
Los Angeles County
The Board of Supervisors recently voted to extend the County’s Covid-19 Tenant Protections Resolution (also known as the eviction moratorium) through March 31, 2023. Among other things, residential tenants are protected against no-fault evictions except for qualified owner move-ins, evictions for a nuisance or unauthorized occupants and pets, and, for certain low-income tenants, evictions due to the non-payment of rent between July 1, 2022 and March 31, 2023 as a result of a Covid-19 financial hardship.
To take advantage of the financial hardship protection, residential tenants are to provide a declaration to a landlord, within 7 days of rent being due, self-certifying that their household income is at or below 80% of the Area Median Income (AMI) for Los Angeles County and that the tenant has been unable to pay rent due to “financial impacts” related to Covid-19. Financial Impacts is defined as either a substantial loss of monthly household income of at least 10% and/or have increased unreimbursed monthly household costs of more than 7.5%, both over the average monthly household income for the 12-month period immediately preceding March 1, 2020. Residential tenants will have up to twelve (12) months from March 31 to repay past due rent owed. After March 31, a landlord seeking to evict a low-income residential tenant for unpaid rent between July 1, 2022 and March 31, 2023 is required to provide the tenant with a 30-day notice to cure or quit in lieu of a 3-day notice.
The County moratorium continues to apply to any unincorporated area of the County as well as to any city within the County that either does not have its own moratorium or has a moratorium that provides less protections to tenants. Once again, the County has indicated that this is the last time that the moratorium will be extended. But, of course, that remains to be seen.
City of Los Angeles
Although the City Council did not extend its Covid-19 eviction moratorium, because of a “rental housing shortage and a humanitarian crisis of homelessness at unprecedented levels,” the City Council recently adopted multiple ordinances that provide new permanent tenant protections (and the County moratorium still protects residents within the City).
These City protections can largely be broken down into three components: (1) prohibiting no-fault evictions; (2) mandating relocation assistance for significant increases in rent for units not otherwise protected by the City’s Rent Stabilization Ordinance (applicable to units constructed prior to October 1978) or the statewide Tenant Protection Act of 2019 (applicable to units constructed more than 15 years ago); and (3) establishing a minimum threshold of fair market rent before a tenant can be evicted.
The Just Cause for Eviction Ordinance (Ordinance No. 187737) enumerates the only 14 grounds upon which a landlord may terminate a tenancy, including the default in the payment of rent, refusal of access to the landlord, failure to execute a new lease with similar provisions at the expiration of the term, a nuisance or an unlawful activity by the tenant. If a landlord seeks to terminate a tenancy in order to recapture the use of the unit for the landlord or a family member, or to convert the unit to a non-residential or affordable housing use, then the landlord must provide relocation assistance to the tenant as outlined in the ordinance. The ordinance only applies upon the expiration of an initial lease or after six months of continuous and lawful occupancy, whichever comes first. A landlord is required to provide notice of the protections in the ordinance to tenancies commenced or renewed after January 27, and to post notice in a common area of the property. Violations of the ordinance constitute a misdemeanor.
The Relocation Assistance for Economic Displacement Ordinance (Ordinance No. 187764) also requires a landlord to pay relocation assistance to a tenant “who elects to relinquish their tenancy following a proposed rental increase that exceeds the lesser of (1) the Consumer Price Index - All Urban Consumers, plus five percent, or (2) ten percent,” whether as a single increase or multiple increases over a 12-month period. Any rent or other amounts due to the landlord by the tenant may be used as an offset of the relocation assistance payment. Subject to an exception for certain single-family residences, the relocation assistance amount is to be three times the fair market rent for a rental unit of a similar size as established by the United States Department of Housing and Urban Development plus $1,411 in moving costs.
Finally, the Rental Eviction Restrictions Ordinance (Ordinance No. 187763) limits a landlord’s right to evict a residential tenant for defaults in payment of rent or other charges until “the amount due exceeds one month of fair market rent for the Los Angeles metro area set annually by the U.S. Department of Housing and Urban Development for an equivalent sized rental unit as that occupied by the tenant.”
While the goal of these tenant protections is to address the homelessness crisis in Los Angeles, many are concerned that the protections will disincentivize landlords and the creation of affordable rental housing. And, although landlord groups have been largely unsuccessful in challenging the eviction moratoriums to date, it is anticipated that these new tenant protections are likely to be challenged in the courts.
Please feel free to contact Alicia Vaz at avaz@coxcastle.com if you would like further information on the potential effect of these restrictions.