New CDC Eviction Moratorium

The Center for Disease Control (CDC) issued an eviction moratorium covering essentially all residential properties. To qualify for protection the tenant must provide the landlord with a declaration under penalty of perjury that the tenant

  1. has used best efforts to obtain all available government assistance for rent or housing;
  2. expect to earn for 2020 no more than $99,000 for individuals or $198,000 for joint tax filers;
  3. is unable to pay the full rent due to substantial loss of income, loss of work hours, wages, lay-off, or extraordinary out-of-pocket medical expenses;
  4. is making best efforts to pay as close to full payment as circumstances permit;
  5. eviction would likely make the tenant homeless or forced the tenant to move in close quarters in a shared-living arrangement;

The CDC argues in its moratorium that preventing evictions will help slow the spread of COVID-19. It cites this argument as giving the CDC authority to issue the eviction moratorium.

The CDC moratorium does not apply to evictions based on a tenant

  1. engaging in criminal activity;
  2. threatening health or safety;
  3. damaging or posing an immediate and significant threat to property;
  4. violating building or health codes or similar laws;
  5. violating contractual obligations other than non-payment of rent or other charges

The CDC moratorium is set to expire December 31, 2020.

 

CHOP Chaos Alleged in Class Action

People defecating in a building lobby. Assaults and harassment. Trespassing and vandalism. Numerous reports of sexual assaults. A man shot, dying while a mob chasses off emergency responders. Police ignoring 9-1-1 calls for help; the area so out of control they say that cannot enter it. A condominium owner “physically assaulted by a CHOP participant while attempting to negotiate with CHOP participants in his capacity as President of the” condominium homeowners association. These are just some of the long list of allegations in a class action filed in federal court against the City of Seattle centering on the Capital Hill Occupied Protest.

The plaintiffs allege that pervasive graffiti covered most available surfaces and if painted over soon returned, often with threats of violence and arson. The Complaint relates the alleged account on one such encounter.
As he started to paint over the graffiti, the worker was accosted by a group of CHOP participants. The participants ordered him to stop removing the graffiti and threatened to burn the building down if he did not comply. Because of the threats, the maintenance worker left without painting over the graffiti, emotionally distraught due to the threats of violence and arson.

The plaintiffs argue that “the City’s active support, encouragement, and endorsement of the occupation” of Seattle’s Capital Hill neighborhood led to the area becoming dangerous and unlivable.
CHOP participants occupied the streets and sidewalks 24-hours a day with “speeches, debates, movies, music, and various other activities—including, in some instances, illegal fireworks shows” with “disturbances and noise pollution extend well past 10 p.m. and typically into the early morning of the next day.”
The plaintiffs assert that Cal Ansderson Park in Capital Hill was turned into a tent city with “violence, vandalism, excessive noise, public drug use.”
According to the Complaint, residential Capital Hill tenants have threatened to break their leases.

A new property opened in the area with 45 residential units, with only 3 having been leased out. To those unfamiliar with Seattle, even in the current economy, available rental units typically go quickly. Not in the Capital Hills area, according to the complaint. There is “no interest in the 42 unleased units, because no one is interested in moving near CHOP.”

The plaintiffs had no way of attracting customers, and/or could be accessed due to blocked streets. Unable to generate revenue, many residential and commercial tenants asked landlords for rent relief. Many are small, locally-owned stores. Some landlords gave concessions in the form of free rent, resulting in economic loss, but even so many of the small commercial tenants are still facing bankruptcy.

The plaintiffs make a clear statement that they support first amendment rights and the message of “those like Black Lives Matter who, by exercising such rights, are bringing issues such as systemic racism and unfair violence against African Americans by police to the forefront of the national consciousness” including “many of those who have gathered on Capitol Hill.”
According to their statement in the Complaint, they do “not seek to undermine CHOP participants’ message or present a counter-message.” Their “lawsuit is about the rights of…businesses, employees, and residents” who “have been overrun by the City of Seattle’s unprecedented decision to abandon and close off an entire city neighborhood, leaving it unchecked by the police, unserved by fire and emergency health services, and inaccessible to the public at large” subjecting “businesses, employees, and residents…to extensive property damage, public safety dangers, and an inability to use and access their properties.”
While the Complaint reads as a parade of horribles, bad policy does of itself not lead to government liability. The plaintiffs allege violations of civil rights under color of state law (known as a ‘1983’ action after a statutory code provision), and assert other legal theories of liability

New York Eviction Moratorium Challenge Dismissed

A federal judge struck down constitutional challenges to Governor Cuomo’s eviction moratorium orders.

The moratorium allows tenants to apply security deposits to rent provided the tenant replenishes the funds on a defined schedule, and temporarily prohibits landlords from starting an eviction against tenants facing financial hardship related to the pandemic.

The Governor’s Orders did not address then pending eviction cases, but as the Court pointed out the New York state courts closed in March and all eviction cases were suspended.

The first moratorium temporarily paused all evictions regardless of grounds.  A later order clarified that evictions on grounds other than non-payment against tenants experiencing financial hardships could proceed.

A group of landlords sued Governor Cuomo in federal court challenging the constitutionality of the orders on various legal theories. The Court dismissed the case in a summary judgment ruling.

The Court noted as background that evicting a tenant in New York, especially a residential tenant, is slow, cumbersome and extremely tenant-favorable process, especially when compared to analogous procedures in other states.

The Court noted several times in its opinion the temporary nature of the New York eviction moratorium. “[T]here is nothing permanent about [the eviction moratorium order]; it expires on August 19.”

The Court reasoned that the moratorium does not forgive rent, and landlords will be able to attempt to collect and/or evict tenants once the moratorium expires. “As long as the order is in place, tenants will continue to accrue arrearages, which the landlord will be able to collect with interest once the Order has expired. Furthermore, landlords will regain their ability to evict tenants once the Order expires.”

The Court pointed out that landlords “can still initiate eviction proceedings against the tenants who are not facing financial hardship but who have chosen not to pay their rent” and “will be able to move against their other tenants after August 19.”

The Court reasoned that the moratorium is not a regulatory taking because landlords still retain many economic benefits of ownership such as collecting rent from tenants not facing financial hardship and collecting security deposit funds from tenants affected by the pandemic.

The Court stated that the law is clear that “state governments may, in times of emergency or otherwise, reallocate economic hardships between private parties, including landlords and their tenants, without violating” the US Constitution.

Download a copy of the Court’s opinion.

New York Landlord-Tenant Attorneys

[businessdirectory-listings tag="New York evictions" title="New York Landlord-Tenant Attorneys"]

Landlords Sue City of Los Angeles

Many landlords “have mortgages on their properties that they are unable to pay without a steady stream of rental income.” Landlords “rely on rental income to maintain and secure their properties and pay employees, among other operating and personal expenses, including payment for food and housing for their own families.” Landlords are “also required to pay the substantial property taxes, utility fees and other assessments on their respective properties, which taxes, fees and assessments cannot be paid in the absence of rental income.” Many “cannot financially survive if a significant number of their tenants do not pay rent for a prolonged period of time.”

These are some of the allegations landlords raise in a complaint filed in US District Court challenging the Los Angeles Eviction Moratorium as violating both the California and US constitutions.

Landlords assert that the Eviction Moratorium will put many landlords “out of the rental business, either through foreclosure and/or bankruptcy, ultimately reducing the badly needed supply of rental housing within the City and further driving up the cost of housing.” According to the plaintiffs, the “City was fully aware of this when enacting the Eviction Moratorium, with some officials openly hoping to convert private distressed properties to public housing.”

The City of Los Angeles Eviction Moratorium prohibits “landlords and property owners from initiating or continuing residential eviction proceedings based upon non-payment of rent” but “does not require tenants to provide notice, let alone documentation, of their inability to pay.”

Tenants “may continue to occupy their respective premises at no charge, utilizing the water, power, trash, sewage, and other fees that the landlords must continue to pay without reimbursement.

While the LA Eviction Moratorium “ostensibly only applies if a tenant is unable to pay due to circumstances related to the Pandemic” in reality “it does not require tenants to provide notice, let alone documentation, of their inability to pay.”

Landlords have no process in which to challenge the tenant’s asserted inability to pay. But, the Eviction Moratorium “creates a private right of action in favor of only tenants whereby tenants are allowed to sue for alleged violations of the moratorium, subjecting landlords to civil penalties of up to $15,000 per violation.” (Emphasis originally in plaintiffs’ Complaint.)  

So, “while the Eviction Moratorium bars” landlords from evicting tenants “it provides a new weapon for tenants to use against landlords.”

It is “unlikely that tenants who do not pay rent during the” pandemic “will be in a position to pay back rent, in addition to their normal rent.”  Yet the City gives tenants a grace period that will extend for twelve months beyond the declared pandemic emergency “irrespective of the tenant’s ability to pay some or all rent, the term of the lease, any agreed plan or schedule for repayment, or any evidence demonstrating that the tenant will actually be capable of paying back rent at the expiration of the one-year grace period.”

While landlords can theoretically eventually sue tenants for back, the likelihood of ever actually collecting many months of back rent is minimal, at best. For tenants who move during the moratorium period, there is essentially no chance for landlords to recover rent. If they were to try, the landlords would incur tremendous (and likely unrecoverable) litigation expenses.

These are some of the allegations and arguments made by landlords in their lawsuit challenging the constitutionality of the LA Eviction Moratorium. The landlords conclude that “as well-intentioned as [the Eviction Moratorium] may be” it has the effect of jeopardizing the “businesses and livelihoods” of landlords, and by driving some landlords out of business may take rental properties off the rental market, increasing rental housing scarcity.

If you are a California landlord or tenant, see our landlord-tenant lawyer directory to find legal counsel.

Seattle First in Time Law Upheld

The Washington State Supreme Court recently upheld the Seattle First in Time law. Landlords had challenged the law as unconstitutional. A trial court struck down the First in Time law, but the Supreme Court overturned the trial court and upheld the law.

Seattle residential landlords must post their rental criteria and documentation needed for each criterion. Landlords must note the date and time they receive rental applications and must accept the first qualified applicant. The applicant has 48 hours to accept the lease.

There are certain exemptions for properties in which the landlord also resides.

This short summary is not a substitute for legal advice.

Portland Passes Tenant Screening Restrictions

The Portland, Oregon city council recently passed new laws restricting landlords in screening for rental applicants.

Landlords must give 72 hours notice before accepting applications, then are required to accept the first qualified applicant. The income and credit score requirements landlords may use are capped. Landlords’ use of criminal background checks is limited.

The new laws are aimed addressing homelessness and housing affordability. Critics argue the new laws will drive some landlords out of the market, making rents more expensive and exacerbating the problems.

Washington Legislature Passes Landmark Landlord-Tenant Reforms

The Washington state legislature has passed sweeping changes to residential landlord-tenant laws, aimed at preventing homelessness. The new bill is expected to be signed into law by the governor.

The reforms slow the eviction process and provide tenants new and expanded opportunities to stay in their current housing by paying only rent owed (including utilities and a capped amount of late fees).

Critiques argue these reforms will cause increases in rent for all residential tenants. Since landlords can no longer enforce security deposit payment through an eviction notice, security deposits will be difficult at best to collect. History and basic economics teaches us that landlords will pass this increased risk to all tenants by increasing the rent.

A pay rent or vacate notice will require a 14-day cure period, as opposed to a 3-day cure period. Landlords will have a strong incentive to serve these notices immediately if rent is late, to get the clock moving.

Although in the past landlords often obtained judgments for all money owed, including court costs, these judgments more often than not went uncollected, as they were against tenants with no means to pay the judgments. Under the new law, landlords will have more opportunity to collect some of the money owed than in the past.

Contact and landlord-tenant lawyer for more information about how Washington’s new landlord-tenant laws affect you.

Rent Control Coming to Oregon

Oregon is expected to enact rent control in the near future.

Is this a good idea? A consensus of economists is that it is a bad idea.

Liberal and conservative economists both conclude that rent control is bad economics. In a 1992 survey the American Economic Association found 93% of economists agreed that a “ceiling on rents reduces the quantity and quality of housing available.” [1]

Prominent liberal economist Paul Krugman stated in a New York Time op-ed piece that “rent control is among the best-understood issues in all of economics, and—among economists, anyway—one of the least controversial.” [2] Least controversial because the undesirable side effects of rent control are “immediately obvious” to “an economist, or for that matter a freshman who has taken Economics 101.” [3]

Rent controls exacerbate shortages of affordable housing. Rent controls push landlords to convert properties to non-rental uses, such as condominiums.

After rent control was enacted in Boston in the 1970s, about “10 percent of the city’s rent-controlled housing stock was converted to condominiums and moved out from under the grasp of the ordinance.” [4]  After rent control was reversed in the 1980s, the trend away from renting units out also reversed itself. After rent control ended there was “a 6 percentage point increase in the probability of a unit being a rental” as opposed to a condominium, or other use. [5]

Rent controls discourage landlords from investing in upkeep. With rent arbitrarily capped, landlords have less means and less incentive to maintain units. Landlords are only legally obligated to provide housing that is fit for human habitation. They are not obligated beyond that low threshold.

“Though rent control does not seem to lead to catastrophic maintenance failures, it appears to reduce the maintenance performed on rental units. As landlords can be fined for allowing water and heat failures, but not for cracked paint, this result is not surprising.” [6]

Rent controls lower property values of rental properties, often leading government to make up lost revenue by raising taxes on everyone else. The “tax burden is shifted not only to single family homeowners, but also to tenants in the uncontrolled market.” [7]

Policies that increase housing supply, rather than shrink it, might be better policy.

Minneapolis, for instance, has done away with single-family zoning, opening up development of apartments and condominiums.

 

 

 

[1] Alston, Richard M.; Kearl, J. R.; Vaughan, Michael B. (1 May 1992). “Is There a Consensus Among Economists in the 1990’s?”

[2] Reckonings; A Rent Affair, Paul Krugman, New York Times, June 7, 2000.

[3] Reckonings; A Rent Affair, Paul Krugman, New York Times, June 7, 2000.

[4] Navarro, Peter. 1985. Rent Control in Cambridge, Massachusetts. Public Interest 78(4): 83- 100.

[5] Sims, David P. 2007. Out of Control: What Can We Learn from the End of Massachusetts Rent Control? Journal of Urban Economics 61(1): 129-51.

[6] Sims, David P. 2007. Out of Control: What Can We Learn from the End of Massachusetts Rent Control? Journal of Urban Economics 61(1): 129-51.

[7] Navarro 1985, 96.

Emotional Support Chickens

Emotional support chickens? Really? Read on. 

Under current federal law, all a tenant needs is a letter from a medical professional or counselor that any animal is needed for emotional support, and pretty much the landlord must accept the animal. No choice. No pet fees or deposits. 

Recently in a rental housing industry listserve someone posted about their client whose tenant presented a letter from a doctor indicating the need for emotional support chickens (plural). Now the Housing and Urban Development Department is after the landlord for refusing to allow a chicken coop in the residential rental unit. 

We have no way to verify the story, but there is no incentive for the posting to be fictitious, and the scenario, as crazy as it may sound, is consistent with current federal law on emotional support animals. 

service animal

Companion Animals and Fair Housing

You sometimes see signs in restaurants prohibiting all animals except service animals. Service animals and emotional support animals are not the same things. Different laws apply to service animals and emotional support animals.

The definition of service animal under the Americans with Disabilities Act is a dog trained to do work or perform tasks for an individual with a disability. A service animal does not require professional training, and no certification is required.

An emotional support animal under fair housing laws can be any animal, not just a dog. No training is needed. All that is needed is a simple letter from a doctor or therapist indicating that the individual has a metal disability and that the animal lessons the effects of the disability.

Note that the emotional support animal rules are under fair housing laws. Fair housing laws are for housing, not places of public accommodation such as restaurants. The rules regarding service animals are under the Americans with Disabilities Act, which does apply to restaurants.