Landlords Challenge Eviction Freeze

by | Jun 3, 2020 | Rental Property Management Tips

Landlords in New York have filed a lawsuit challenging the extension of a moratorium on evictions for nonpayment of rent that will continue into August.

In addition to a halt on eviction filings, landlords would be required to apply security deposits to unpaid rent.

In the complaint, the landlords argue that the freeze on evictions violates their constitutional rights by taking away property without due process and interfering with their ability to enforce the lease contract. Their goal is to overturn the governor’s order.

In California, the cities of Upland and Duarte recently rescinded their eviction freeze orders after receiving notice from attorneys that local landlords there planned to sue for their lost income if they are forced to house nonpaying tenants. Upland’s order would have allowed tenants an additional six months after the city’s emergency order was suspended to pay past due rent.

A national landlord doing business in Washington State wasn’t so lucky. The state’s attorney general just announced a $350,000 settlement against the property management firm that chose to buck the state’s eviction moratorium by serving eviction notices to 14 nonpaying tenants and sending demand letters to many others, a move the attorney general dubbed harassment. The company claims it was accommodating tenants by waiving late fees, absorbing credit transaction fees, offering short-term lease renewals, and freezing rent increases. As a condition of the settlement, the landlord cannot serve eviction notices before July 31.

When the COVID-19 pandemic hit, local governments scrambled to find a way for tenants to shelter in place and limit the transmission of the virus. An easy way to do that was to take away the right to evict. While federal and state stimulus funds were made available to tenants, there was little corresponding aid to the landlords who housed them, in some cases for free. There also was no requirement that tenants use government subsidies to pay rent.

Lawmakers encouraged landlords to offer installment plans and other accommodations, and many did. But taking away the landlord’s right to evict the tenant for failing to pay anything took away the landlord’s main bargaining tool. These broad-stroke rules also prevented landlords from pursuing evictions against tenants who weren’t paying before the pandemic and the stay-at-home orders began, and emboldened tenants who could pay to withhold rent.

Now, as these eviction freezes are expiring in many areas, landlords are queuing up eviction filings, and it appears that 2020 may be known as the summer of evictions. That’s going to impact local governments who struggle to house the homeless, and it’s going to affect the way landlords screen tenants as more and more nonpaying tenants enter the rental applicant pool.

The sudden onslaught of eviction filings no doubt will cause extensive delays, and there is no way to know at this time how judges are going to handle the situation. This is frustrating for landlords struggling to keep their payments current. However, it is imperative that landlords play by the book, and not use self-help remedies to sidestep the eviction process. Instead, landlords should:

Continue to work with tenants who are not paying rent so that tenants pay whatever they can. Circumstances change, and getting paid for one month is better than not getting a dime;

Avoid actions that are viewed as retaliation or “wrongful eviction” which can cost landlords in court. Examples include threats, insults, turning off utilities, and changing locks; and

Maintain documentation of the tenancy and the default so that when the time finally comes for the eviction hearing, the case will be successful.

This post is provided by Tenant Verification Service, Inc., helping landlords reduce the risks of renting with fraud prevention tools that include Tenant Screening, Tenant Background Checks, (U.S. and Canada), as well as Criminal Background Checks, and Eviction Reports (U.S. only).

Click Here to Receive Landlord Credit Reports.

Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.

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