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.

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