LA City Creates Permanent Tenant Protections

 

Just a few days before COVID-era tenant protections expire in the city of Los Angeles, the LA city council decided to create new, permanent, extremely aggressive tenant protections that will harm landlords for many years to come and likely force many landlords to leave the city of LA. This article discusses upcoming rules relating to residential rental properties in the city of Los Angeles only and particularly non-RSO (rent-stabilized) properties. If the rental property is located outside of the city of Los Angeles or is an RSO property, this article may not apply to you. Note: The final version of the law could be different so be sure to read the final version of the law once it goes into effect.

Just Cause Expanded

Prior to COVID, just-cause eviction protections in the city of Los Angeles applied only to RSO properties. That is no longer the case. Under a new law passed by the city council on January 20, 2023, and awaiting the mayor’s signature (who signaled eagerness to sign the law), rental properties that have historically been exempt from just-cause eviction protections, including single family homes, condos, and new construction, will now be subject to just-cause eviction rules.

So what does just-cause mean? In simplest terms, just-cause means landlords must justify the reason for the eviction and the reason for the eviction must fall within one out of several “allowable” reasons. Further, just-cause can be either “at-fault” or “no-fault.” An “at-fault” eviction is when the tenant is being “bad.” In other words, the LA city tenant is doing something they shouldn’t be doing, such as not paying the rent, violating a term of the rental agreement, subleasing or assigning, causing a nuisance, damaging the property, etc. A “no-fault” eviction, on the other hand, is an eviction where the landlord wants the tenant to vacate the property not because the tenant is doing anything wrong, but rather because the landlord wants the property back for some other reason unrelated to the tenant’s fault. An example of a no-fault eviction is when the landlord wants the tenant to vacate the property so that the landlord can move in.

Let’s dive into no-fault eviction a bit more. Under the new LA city tenant protections law passed by the city council on January 20, 2023, single family homes, condos, and new construction, among other types of properties, will be subject to just-cause eviction protections. Landlords who own a single family home or a condo will no longer be able to simply give a tenant a 30/60 day notice to terminate tenancy when a landlord wishes to terminate a month-to-month tenancy, unless the landlord specifies an allowable just-cause reason to terminate the tenancy in the city of Los Angeles. With the new changes, landlords will have to list the no-fault reason to terminate a month-to-month tenancy on the notice. The no-fault reason cannot be just any reason the landlord wishes. Rather, the no-fault reason will have to be from an allowable list that the city of LA creates. Assuming the landlord can qualify the reason under one of the allowable no-fault reasons that the city creates, the landlord will also have to pay the tenant money to move out of the home under this scenario. How unbelievable is that? Not only must a landlord have a reason that the city of LA allows to terminate a tenancy, but the landlord must also pay the tenant to move out of the house that the landlord owns. To add an additional insult to landlords, wanting to sell the rental property is not a valid no-fault reason for eviction. This means landlords will not be able to evict a tenant simply to sell the property vacant.

Landlords can still evict for allowable at-fault reasons and landlords in the city of LA will not need to pay relocation money to the tenant when evicting for an at-fault reason.

Landlord Tip: Make sure your rental agreement is in writing and extremely detailed. Document lease violations clearly and as strongly as possible. When a tenant does something that could be grounds for an at-fault eviction, consider evicting right away rather than waiting. The longer you wait, the less of a chance of a successful at-fault eviction. If you have a choice, evict for an at-fault reason instead of a no-fault reason to avoid paying relocation fees. We offer a landlord-friendly rental agreement template.

The just-cause tenant protections in the city of LA will apply after a tenant has lived in a rental unit for six months or when a lease expires, whichever comes first.

Landlord Tip: When a tenant first moves in, create a tenancy that is month-to-month or at least one that is less than six months. During this “trial” period, determine if you want to keep the tenant. If you decide not to keep the tenant, be sure to terminate the tenancy and evict before the just-cause tenant eviction protections apply.

More details here.

Is Your Tenant Late on the Rent?

Historically, if a tenant fails to pay the rent by the due date, the landlord has the right to serve the tenant with a “3 Day Notice to Pay Rent or Quit.” Makes sense, right? If a person fails to pay when payment is due, you can do something about it. To use an analogy, when you go to the grocery store, before you leave the store, you go to the checkout counter and pay for what you receive. Apparently, the LA city council doesn’t believe landlords should be paid right away if a tenant doesn’t pay for what they agreed to pay when they rented a property.

Under the new LA city tenant protections law, tenants in the city of LA cannot be evicted for non-payment of rent until they fall behind by more than one month’s worth of “fair market rent” as determined by the U.S. Department of Housing and Urban Development. So, to go back to my analogy above, the grocery store shopper could walk right out of the store without paying and the owner of the store couldn’t pursue legal action against the shopper until the shopper accumulated a certain amount of debt from the grocery store. Ridiculous, right? Not only have landlords been pushed to the floor since March 2020 by the LA city COVID eviction moratorium, but now landlords are being kicked into the ground by these new LA city tenant eviction laws.

Rent Increases

There are several laws restricting rent increases already on the books. Under the new LA city tenant protections law, you can add another rent increase law to what already exists. Landlords in the city of LA who want to increase the rent by more than 10% would have to pay the tenant three months of fair market rent if the tenant decides to move, plus some moving expenses.

LA City Permanent Tenant Protections Video

Last Minute Changes?

There could always be a last minute change to the law. And, to provide total transparency, I have not seen the actual city ordinance yet. Once I see the ordinance and can parse through the intricacies of the new law, I will post another article on this site, so please be sure to bookmark the blog and follow us on social media.

Additional Information

* It is important for landlords to understand what jurisdiction the rental property is located in, and whether or not there are any special tenant protections or rent control applicable to the property. This article does not discuss RSO rules which can be and are significantly different from non-RSO laws.

Court Challenge?

Hopefully, these egregious laws will be challenged and struck down as illegal and unconstitutional. But for now, these are the rules that landlords who own residential rental properties in the city of Los Angeles will need to contend with.

Disclaimer

The information in this article and blog are not meant to be legal advice and is intended for educational purposes only. The laws change frequently and this article may not be updated to reflect current rules. Do not rely on this article when making legal decisions. Consult with legal counsel regarding your particular case before taking any action.

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