County Moratorium Continues Low-Income Tenant Protections Through December

Update for tenants suffering COVID-related financial impact: the County Board of Supervisors has amended the county’s moratorium to continue eviction protections for low-income tenants through December. A court in October had enjoined the county from enforcing protection related to nonpayment of rent, but the county subsequently amended the moratorium in mid-November to address the court’s concern.  Protection against eviction is still in effect and will be through December. Let’s look at what it means for tenants.

Background

The Los Angeles County moratorium has provided important protection for Beverly Hills renting households since early in the pandemic. You may not have heard about these protections from our Rent Stabilization Office, but we have posted about it. Suffice to say that renting households that continue to be financially impacted by COVID-related circumstances and who cannot pay full rent and still delay the payment of rent by self-certifying to the landlord.

If the landlord does take a tenant to court for a suspected fraudulent self-certification, for example, the tenant will have an ‘affirmative defense’ so long as the declaration was filed “within seven days after rent is due” and can demonstrate COVID-related financial impact. Documentation of COVID economic impact is optional but may be advisable to support the claim. If the self-certification is disputed by the landlord, then the tenant has the burden of proof to show factual support of COVID-related financial impact.

This is the only protection against eviction for nonpayment of rent now that both the state and city moratoriums have expired. However the county moratorium only protects low-income households that earn 80% or less of area median income — and it is only in effect through December 31, 2022. As of now, December is the only rent period remaining for which a tenant may invoke the protection of the county moratorium.

Landlord Lawsuit

The county moratorium allows tenants to ‘self-certify’ economic impact when delaying the payment of rent and it threatens the landlord with civil and even criminal penalties if they refuse forbearance. The relevant passage in the moratorium comes in Section VI(A)(1)(b)(ii):

Effective June 1, 2022, through the end of the Extension Protections Period, a Residential Tenant whose household income is at 80 percent Area Median Income or below and who is unable to pay rent incurred from June 1, 2022, through the end of the Extension Protections Period is protected from eviction under this Resolution, so long as the reason for nonpayment was Financial Impacts Related to COVID–19, and the Residential Tenant has provided notice to the Landlord to this effect and self-certified their income level and financial hardship within the timeframe specified….

Plaintiffs Apartment Association of Greater Los Angeles claimed in federal court that the county moratorium’s definition of ‘financial impacts’ was unconstitutionally vague. Indeed the Board of Supervisors intentionally let financial impact be broad to capture a range of tenant hardship. But the court disagreed with that approach and found that the plaintiffs would likely prevail in court with that argument. The court preliminarily enjoined enforcement of the moratorium provision.

The injunction meant that the protection against eviction for nonpayment would end on November 30, 2022 — one month earlier than what was intended by the Board of Supervisors. (The moratorium is currently in Phase II wind-down and is set to expire on December 31st.)

Second, landlord plaintiffs claimed that the prohibition on eviction due to COVID-related nonpayment of rent violated their due process rights. The issue here is a bit more complicated. The Association claimed that the moratorium would penalize the landlord for disputing the self-certification without basis and, if the landlord takes the tenant to court, risks civil and criminal sanction even though the landlord cannot assess a tenant’s hardship from the self-certification alone. (Documentation is optional under the moratorium.)

The federal court also agreed with the landlord on the latter claim. On October 19, 2022 the court granted the Apartment Association a preliminary injunction. “Effective December 1, 2022, the County is hereby enjoined from enforcing the Tenant Protections described in Section VI(A)(1)(b)(ii).”

The court’s order was relatively narrow; it meant that the county can no longer enforce only the provision pertaining to protection from eviction for nonpayment due to COVID. Other county moratorium protections remain in place through December — such as protection against eviction for an unauthorized occupant or pet (related to COVID) and also certain forms of harassment.

County Board of Supervisors ‘Updates’ the Moratorium Resolution

The Board of Supervisors on November 15, 2022 moved to “update” the moratorium resolution to address the court’s concerns about vagueness with regard to economic impact; and to clarify what “protection from eviction” means. Specifically the board made these changes as was described in the board’s motion:

  • Clarify that a “substantial loss” of household income is a loss of at least 10% of a tenant’s monthly household income and “increased costs” for food, fuel, child-care, and/or unreimbursed medical expenses must amount to greater than 7.5% of a tenant’s monthly household income;
  • Clarify that “protection from eviction” means that a qualified tenant is entitled to an affirmative defense against unlawful detainer action on those grounds;
  • Clarify that a landlord is not criminally or civilly liable for filing an unlawful detainer action “if the landlord has a reasonable belief that a tenant’s self-certification is fraudulent, or that the tenant cannot carry the burden to prove the affirmative defense provided by the resolution”;
  • Clarify that a tenant has the burden of proof when asserting their affirmative defense.

The Board of Supervisors believes that these changes will allow the moratorium to survive any further court challenge. The Beverly Hills Rent Stabilization Office communicated to tenants and landlords that the county moratorium remains in effected through December pursuant to the county update. Of course Renters Alliance brought it to the city’s attention!

What Does It Mean for Tenants?

The court’s preliminary injunction forced the county to amend the moratorium with a more specific definition of financial impact and also it eased a landlord’s concern about paying a penalty if the landlord challenges the tenant’s self-certification in court. Some landlords may feel emboldened to bring an unlawful detainer against a tenant who has invoked the county moratorium protection against eviction for nonpayment. The burden of proof of financial impact related to COVID falls more squarely on a tenant.

We can make a few suggestion:

  1. A tenant who invokes the moratorium should consider including documentation along with the self-certification to the landlord. That may help make a good-faith case for forbearance and, more importantly, may show the landlord what the tenant would show the court to support a claim of financial impact.
  2. The documentation of financial impact should at least reflect the county’s new definition of financial impact as included in the amended moratorium. At a minimum that documentation should suggest to a neutral decision-maker (such as the court if it comes to that) that the financial impact is real and is related to COVID.
  3. If the landlord balks at the self-certification he may verbally warn of a 3-day notice to pay or quit, or may provide that notice to the tenant. If the landlord is asking for more definitive proof of impact or relation to COVID, the tenant should consider providing additional documentation.
  4. If the landlord serves the tenant with a 3-day notice, the 3-day notice may demand all of the rent that was delayed pursuant to the county moratorium starting July 1st. The tenant may choose to pay rent arrears, if that is practicable. Payment is due by the end of the third day after the date of the notice and those three days do not A 3-day notice does not include weekends or holidays.
  5. Alternately a tenant with a 3-day notice should contact city housing rights legal services provider Bet Tzedek at 323–939–0506. Be sure to choose the phone option for Beverly Hills residents and mention the date of the notice. Bet Tzedek intake paralegal Jonathan Alvarez may not return the call on a timely basis, so be prepared to pursue another option such as Legal Aid.

If the landlord files an unlawful detainer then the answer to the court is due within 5 days after being served.

An answer is a must; ignore it and it goes to a default judgement. Again legal representation is advisable. Alternately a self-help tool like the Tenant Power Toolkit from the The Debt Collective can help a tenant respond and even file with the court on the tenant’s behalf. (Disclaimer: we have not used the toolkit so it comes without an explicit endorsement. It is the least best option for a first line of defense in an eviction proceeding.)

More on the Lawsuit Claims

The county moratorium allows qualified tenants to self-certify COVID-related economic impact. Documentation is optional. The moratorium allows a tenant an ‘affirmative defense’ against eviction which, in this instance, allows a tenant to demonstrate to the court financial impact related to COVID and thereby avail themself of the moratorium’s protection against eviction for nonpayment.

The Apartment Association of Greater Los Angeles, which is a trade association that represents 30,000 owners and managers of residential rental housing, made two principal arguments to the court: 1) that the definition of economic impact “related to COVID” is too vague in that any economic impact could be somehow construed as related to COVID; and 2) that the provision which would bar a landlord from bringing an unlawful detainer “based upon facts which the Landlord has no reasonable cause to believe to be true” unnecessarily exposes landlords to civil and criminal penalties through the landlord can’t necessarily assess a tenant’s claim of finanical impact prior to bringing that action.

The court agreed with the landlords on these points. As for defining economic impact, the court said, “Given the breadth of these definitions, it would be impossible for a landlord to determine whether the affirmative defense might apply in any particular instance.” The court order continued, “Even the most exacting categories of ‘Financial Impacts,’ namely ‘substantial loss of income’ and ‘extraordinary’ medical expenses, are inherently variable and subjective….”

The court found that the landlords’ claim of a due process infringement had merit too. “That same vagueness also deprives landlords of the ability to gauge whether any particular tenant can successfully invoke the affirmative defense. Without any meaningful guidance from the Resolution, landlords are left to guess, not just as to the likelihood of success of any unlawful detainer action, but as to whether the very filing of any such action is prohibited. (Emphasis added.)

The court also took exception to the county’s defense of moratorium language that says landlords “must accept” a tenant’s self-certification of inability to pay rent. Again this goes to the due process claim as the implication is that a landlord can’t challenge the tenant’s self-certification. When asked about that language the county claimed merely it means the landlord must accept delivery of a tenant’s self-certification — not accept the self-certified claim of financial impact. “This argument is not persuasive,” said the court in finding that the Association would likely prevail in litigation about the due process claim too.

Our Take

The Apartment Association is a frequent flier in state and federal courts. It has filed lawsuits to invalidate the moratoriums in Beverly Hills and City of Los Angeles (in addition to the county) and routinely files lawsuits seeking to invalidate rent control. Indeed the wife of the Apartment Association’s Executive Director, local landlord Dan Yukelson, is a named plaintiff in a lawsuit against Beverly Hills rent stabilization.

AAGLA legal fundraising appealWhile these lawsuits largely fail, the publicity nevertheless provides the Association with an evergreen fundraising opportunity. It provides member landlords with regular progress reports and always tacks-on a fundraising appeal.

Thankfully our city, and the county, has largely stood by tenants before and during the moratorium with protections intended to bring a measure of stability to those who inhabit rental housing.