Beverly Hills Moratorium Sunsets May 31st: What It Means to You

City Council officially agreed to sunset the city’s COVID moratorium effective May 31st. The move had been anticipated as early as January and picked up steam with two Council meetings in April where the groundwork was laid. Coincident with their effort to wind-down the pandemic-era tenant protections, councilmembers also agreed to cap the rent increase for the next 12 months at a maximum of 3.1% and to create a limited rent subsidy program to cushion the impact of post-COVID rent increases. Let’s look at what the moratorium sunset means and what’s left to be decided.

City Council on May 10th adopted an ordinance to amend the urgency ordinance that enacted COVID-era tenant protections in March 2020 that included a prohibition on no-fault evictions, a prohibition on eviction for nonpayment of rent and (for rent-stabilized tenants only) a freeze on rent increases. With the expiration of the moratorium on May 31st things will change for all households that rent housing in Beverly Hills.

Update Evidently the Beverly Hills Rent Stabilization Office was sufficiently embarrassed by all of the outdated, confusing and unhelpful information that was posted to the city website that staff finally decided to update it. Well, we gave them a shove in that direction by calling it out at a recent meeting. Get it while it’s fresh at the RSO landing page or download the city’s new urgency ordinance update that was posted online in late May. We prefer to direct tenants to city resources when they are available but so rarely is that information fit for purpose.

Eviction for Post-Moratorium Nonpayment Can Proceed

Local Moratorium

The expiration of the Beverly Hills moratorium on May 31st means that starting June 1st there will no longer be any protection, of any kind, from eviction for tenants who can’t pay the full rent. Starting June 1st, unpaid rent can subject renting households to a 3-day notice to pay or quit and, following thereafter, a court summons if that rent remains unpaid.

Waiting on a Housing is Key Application

Also expiring on June 1st is the current state protection against eviction for nonpayment when that household has a ‘pending’ or ‘approved’ application for COVID rent relief through the Housing is Key rent relief program. This applies to households waiting on disbursement of relief money. This does not apply if the program has paid relief that was the subject of that application; or if it has denied that application.

Basically, if the Housing is Key Program says it has done its job, then it’s out of the discussion and it’s up to work out with the landlord. If a household receives a court summons despite having a complete application that is pending or awaiting payment, then there is a form to provide to the court.

It is important that the household verify that there is an application on file with Housing is Key which is deemed to be ‘complete.’ An ‘incomplete’ application which could not be completed because the program ceased taking applications on March 31st is not an application that qualifies a household for protection. By the same token, if the complete application was paid — which can be be verified by calling the program — and the landlord is trying to evict because he says it wasn’t paid, then verifying that fact with the program is a defense in court.

The above protections only apply to rent that was due but which was delayed pursuant to a moratorium. That owed rent can’t be the basis for an eviction. But rent that is not paid going forward, starting on April 1st for most households, and starting on June 1st for Beverly Hills renting households which had local moratorium protection, can be the basis for a 3-day notice and ultimately eviction.

County Moratorium for Low-Income Households

The state blocked the Los Angeles County moratorium from protecting any renting households from eviction for nonpayment through June (unless they had protection under local moratorium). However the county’s moratorium was allowed to take effect for low-income tenants starting July 1, 2022.

If the low-income households (defined as at or below 80% of the Area Median Income for the county) files the appropriate declaration with the county, then that will provide those low-income households with protection…but only starting July 1st. If the low-income household owes rent for April or May, for example, and it was not delayed using the Beverly Hills moratorium, the county’s moratorium won’t protect against eviction for rent owed those months.

Rent Arrears Must be Repaid by June 1, 2023

In addition to ending the moratorium City Council also established a date for repayment of all rent delayed under the city’s moratorium: May 31, 2023. Unpaid rent after that date will be a ground for eviction for nonpayment. Not only that, if the tenant misses that repayment deadline, then any late fees incurred by delaying the rent can be charged too. So missing the deadline can mean a significant payout after late fees, legal fees and court costs are added.

Starting June 1, 2023, any household owing rent delayed under the city’s moratorium is subject to a 3-day notice to pay or quit. If the arrears and additional charges are paid the household won’t be evicted. However if the rent arrears remains unpaid then a court summons for unlawful detainer could follow. The only alternative to eviction is to either negotiate a payment plan or come to agreement to forgive some of the arrears in consideration for a voluntary departure.

Note: The payment of rent that was delayed under the state’s moratorium is a different matter. The landlord could already have moved to collect rent arrears as consumer debt. However that debt cannot be grounds for eviction, under state law, as long as the tenant made the required minimum 25% partial rent payment. Presumably some significant portion of rent arrears was defrayed by the Housing is Key rent relief program, however the way that program was wound-down left no small number of renting households with unpaid rent arrears awaiting a 3-day notice and court summons.

End of the Moratorium Means No-Fault Evictions Can Resume

No-fault evictions are usually the first step in redevelopment, condo conversion, or major remodeling. The ordinance also allows a landlord to use the unit himself, or to house a close relative, and that too is ground for a no-fault eviction. The moratorium pressed the pause button on no-fault evictions in March of 2020 for all residential tenants. Once it sunsets we can expect to see no-fault evictions proceed as soon as June 1st.

A household that had been served with a no-fault eviction notice prior to the moratorium found that notice was ‘tolled’ — the clock was stopped on the required noticing period. The clock will again start to tick starting June 1st. The rest of us could be affected by a no-fault eviction but how we are affected will depend on our situation.

  • Most households won’t be affected because no-fault evictions in Beverly Hills are relatively infrequent. Historically redevelopment has proceeded at a slow pace in Beverly Hills. Multifamily properties didn’t turn over often and limits on building height and density kept the lid on residential development. However this situation is changing. State and local density bonuses can allow greater heights and densities. And we are seeing more multifamily sales since the start of the pandemic. Most recently landlords appear willing in invest in order to reposition the property in the rental market.
  • Rent-stabilized households in Beverly Hills can be evicted for no-fault but have greater protections than other renting households. For one thing, a rent-stabilized tenancy may be terminated only for one of the reasons enumerated in rent stabilization ordinance sections 4–6–6 (for Chapter 6 tenants) and 4–5–501 (for Chapter 5 tenants). Required noticing runs from 90 days to a full year and all no-fault evictions implicate a relocation fee. For these households the sunset of the moratorium will mean something else too: diminished leverage when it comes to demanding a better cash buyout. As no-fault evictions can proceed the landlord’s may choose to wait-out the required notice period and simply pay the relocation fee.
  • Renting households in Beverly Hills that are not rent stabilized generally have fewer protections. A dwelling is exempt from rent stabilization in Beverly Hills if it is a condominium, a single-family home, or an apartment that was permitted for occupancy after February of 1995. These dwellings may be covered by state rent control (the Tenant Protection Act of 2019). State rent control generally covers corporate-owned multifamily, single-family and common-interest developments. However dwelling units owned by an individual, partnership, trust, or other entity which is not corporately controlled are not covered. (Read this AB 1482 fact sheet to understand the difference.)

Whether or not state rent control covers the dwelling will make a difference in how evictions can proceed.

  • Occupants of dwellings which are exempt from rent stabilization and which are NOT covered by the Tenant Protection Act of 2019 can be evicted for any reason. (This is not a no-fault eviction but rather it is a no-just-cause eviction because there is no cause to evict.) Here the required notice is only 60 days and there is no relocation fee due. Most households that either rent a single-family home or a condominium in Beverly Hills, or that rent in multifamily which was permitted for occupancy fewer than 15 years ago, will generally not be covered by state rent control. That means these households can be evicted with 60 days once the moratorium sunsets on June 1st.
  • Occupants of dwellings which are exempt from rent stabilization but which ARE covered by the Tenant Protection Act of 2019 can’t be evicted for no cause but can be evicted for no-fault. Under state rent control, no-fault evictions do require a reason and the state imposes certain restrictions on the landlord when a tenant is evicted. The noticing period is longer than 60 days and the landlord must compensate the tenant with a (meager) state-mandated relocation fee. Every household in Beverly Hills that rents a multifamily apartment permitted for occupation between 1995 and 15 years ago, or that rents a single-family home or condo which is owned by a corporation, will have these additional protections under state rent control.

Final note: The sunset of the moratorium has no effect on at-fault eviction. When a tenant has breached the rental agreement the landlord can issue a 3-day notice to correct a condition like an unauthorized occupant. If rent is due but not paid in timely fashion, or else delayed pursuant to a moratorium, then the landlord can issue a 3-day notice to pay or quit regardless of the sunset date.

End of the Moratorium Means the Rent Can Now Be Raised

Council formal meeting May 10, 2022
Councilmember Bob Wunderlich gains City Council commitment that the rent can only rise a maximum 3.1% this coming 12 months after city staff left open the door to an additional rent increase.

Sunset of the Beverly Hills moratorium means the rent may be raised by a maximum of 3.1% (for some rent-stabilized households) with 30 days notice starting July. This is the first rent increase allowed for rent-stabilized households in Beverly Hills since March of 2020. Again this includes most rental units however not condominiums or single-family homes in the city. But it’s complicated!

Whether the rent can rise by 3.1% or even rise at all for rent-stabilized households will depend on when the rent was last raised. From the ordinance  adopted by City Council on May 10, 2022:

…notwithstanding the provisions of Sections 4–5–303 (C) and 4–6–3, for an allowable rent increase, that for any reason, was not imposed or was imposed at a rate of less than 3.10% for the period July 1, 2019 through June 30, 2020, the maximum allowable rent increase allowed pursuant to Section 4–5–303 (C) and 4–6–3 from June 1, 2022 through June 30, 2023 is 3.10%. Provided, further, if the rent increase was imposed at a rate of less than 3.10%, then the maximum allowable rent increase from June 1, 2022 through June 30, 2023 shall be reduced by the percent increase that was not imposed.

Let’s break that down….

  • A rent-stabilized household that did pay a rent increase of 3.1% as was allowed during the period July 1, 2019 through June 30, 2020 will pay no rent increase until July 1, 2023. The theory behind this provision in the ordinance is that the 3.1% rent increase afforded to landlords at this time is the rent increase that they may have missed during the 2019–2020 period. If a household paid that 3.1% during that period then the household should not pay that 3.1% again. So the next rent increase available to the landlord will be July 1, 2023. In theory as many as 3-in–4 rent stabilized households paid that rent increase prior to the moratorium.
  • A rent-stabilized household that did not pay a rent increase during the period July 1, 2019 through June 30, 2020 will likely see their rent raised by 3.1%. Again, this was the maximum annual rent increase allowed for the city’s 2019–2020 fiscal year but some households escaped that rent increase. Maybe the landlord chose not to raise the rent when he could have or found that rent increase prohibited once the moratorium took effect on March 15, 2020. Whatever the reason, if a household did not pay the maximum 3.1% rent increase then, during the 2019–2020 fiscal year, the landlord can demand it now once the moratorium sunsets. As many as 1-in–4 households could see a rent increase on June 15th or July 1st (so long as the required 30-days notice is provided).
  • A rent-stabilized household that paid something less than 3.1% during the 2019–2020 period can now pay the balance of that 3.1%. This includes Chapter 5 tenants (tenancies that began at a rent of less than $600 monthly). Take for example a household that was eligible for a rent increase sometime during the period of July 1, 2019 to June 30, 2020. The maximum allowable annual rent increase then was 3.1%. If the landlord back then had raised the rent by a smaller percentage — say only 2% — then the landlord would be able to raise the rent by 1.1% now which is the balance of the 3.1% then allowed. (The annual rent increase is not mandatory but instead is up to the discretion of the landlord.)

Yes, it is complicated. We explain the rationale behind City Council’s decision to handle rent increases for the July 1, 2022 to June 30, 2023 period in our post: Rent Can Rise Up to 3.1% for the 2019–20 Missed Rent Increase.

Our Take

We have posted this lengthly explanation about how the expiration of the Beverly Hills moratorium will affect renting households for two reasons. First, it will affect all renting households simply because no-fault evictions can resume. And many rent-stabilized households will see the rent rise again after a two-year hiatus. But it’s all very complicated.

Most important we expect more households will be evicted due to the hot rental market and because the character of rental property ownership seems to be changing. Our fear is greater instability across our rent-stabilized households with deleterious effect on the character of our neighborhoods (such as the loss of senior households) and on school district enrollment.

The other reason why we go to great lengths to inform tenants is because the City of Beverly Hills Rent Stabilization Office has done such a poor job of it. City Council took formal action to sunset the moratorium more than a week ago, but we still haven’t heard a word about it from City Hall — not a tweet on social media or even a lousy press release.

Worse, the RSO website is a riot of confusing and sometimes outdated information and does not even mention the coming sunset of the moratorium on July 1st even though City Council has discussed it since January. That is a goddamn scandal because residents who rent should know how these decisions will affect us.

Additional Resources

Moratorium sunset ordinance (as adopted) May 10, 2022

AB 1482 Tenant Protection Act Fact Sheet (Western Center on Law and Poverty)

Housing is Key information about the eviction process

California Courts self-help eviction guide

Form to contest unlawful detainer pending COVID relief

State Department of Social Services cash assistance resources

State CalFresh food support program

Stay Housed LA legal referrals for COVID-affected households

California Bar legal referral service