Small Landlords Battle Tenant Relocation Fees

by | Aug 26, 2019 | Rental Property Management Tips

A couple from Oakland, California are taking on that city’s new eviction ordinance that required them to pay $6,500 to a tenant for the right to move back into their primary residence.

For many local landlords, that amount will be higher.

Oakland is one of several California cities to pass what are dubbed “just cause” eviction ordinances that are changing the rental landscape for small landlords.

When the Oakland couple was forced to temporarily relocate due to a military transfer, they offered their home on a year-long lease that converted to a month-to-month. They transferred back home less than two years later, and gave the tenant notice to terminate the month-to-month lease.

However, during the time the landlords were away, Oakland lawmakers passed a just cause eviction ordinance that requires landlords to pay tenants a relocation fee as high as $10,800 when taking a property out of service.

The landlords paid the fee, and then enlisted the help of attorneys from Pacific Legal Foundation — a nonprofit service that battles government overreach — to change the law.

In court filings, lawyers argued that the relocation fee is unconstitutional because it forces private property owners to dole out money to private tenants, many of whom have high-paying jobs, and does not require the tenants to prove actual costs to relocate or even to apply the money to relocation.

The landlords also argued that, because the ordinance was passed after their lease was signed, the tenant did not anticipate receiving a relocation fee.

The trial court judge sided with city lawmakers and dismissed the landlords’ lawsuit. However, in the order dismissing the case, the judge indicated that “the Court does not opine on the wisdom or effectiveness of the Ordinance in relieving what is undoubtedly a housing crisis.”

The landlords have filed an appeal. Given the popularity of just cause eviction ordinances, should the appeal be successful, this case will have far-reaching impacts on rental laws in several California cities — and across the country.

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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