Impacts on Landlords Making Evictions
If you own rental property in the City of Los Angeles, it may be subject to the Just Cause Ordinance (JCO). The JCO went into effect on January 27, 2023, and prohibits terminations of tenancies without just cause and requires relocation assistance for no-fault evictions. The City of Los Angeles has put this ordinance in place citing evictions affect on public health, safety, and welfare of residents.
Landlords are now prohibited from terminating a tenancy (for any type of property – now including houses and condos) unless it is based on specific legal reasons including when the tenant is at-fault and when the tenant is not at-fault:
Legal Reasons for Eviction - Tenant At-fault
- Failure to pay rent.
- Failure to cure a violation of the rental agreement.
- Creating a nuisance or causing damage to the property.
- Using the rental unit for an illegal purpose.
- Failure to renew a similar rental agreement.
- Failure to provide the landlord with reasonable access to the rental unit.
- The person at the end of the lease term is a subtenant not approved by the landlord.
Legal Reasons for Eviction - Tenant Not At-fault
- The owner or immediate family member will move into the rental unit.
- Resident manager will move into the rental unit when required by law or by an affordable housing covenant or regulatory agreement.
- Demolition, substantial remodel, permanent removal from the rental market, or conversion to non-residential.
- Government order to vacate.
- HUD owns and is selling the property.
- Residential Hotel being converted or demolished.
- Conversion to affordable housing.
Most notices of termination must now include these specific facts that allow the tenant to understand the reasons for eviction, and all legal notices to terminate tenancies must be sent to the Los Angeles Housing Department within 3 business days of service to the tenant.
There are also specific prohibitions for eviction in place, including changing tenancy terms to prohibit pets that were previously allowed, and evicting a tenant for the presence of one additional adult occupant or minor dependent children.
There are some limited exemptions of residential property types that include rental units subject to the City of Los Angeles Rent Control Ordinance (LARSO), housing accommodations in hospitals, religious facilities, and institutions of higher education, among others. Also, JCO does not apply until after initial lease expiration or 6 months, whichever comes first.
Evictions for Non-payment of Rent / Rental Debt Threshold
Beginning March 27, 2023, a tenant may only be evicted for nonpayment of rent if the tenant’s total rental debt owed exceeds a monetary threshold amount equal to one month of fair market rent for the Los Angeles-Long Beach-Glendale, Area (FMR), set annually by the U.S. Department of Housing and Urban Development (HUD). This limitation will also apply to RSO units beginning March 27.
Rent Relocation Assistance
Also starting on March 27, 2023, landlords will be required to pay relocation assistance to tenants if the tenant chooses to move after receiving a rent increase exceeding the Consumer Price Index (CPI) plus 5%.
A “qualified tenant” is any tenant who on the date of service of the written notice of termination is 62 years of age or older; handicapped, or disabled, or who has one or more minor dependent children.
Unless a tenant is a qualified tenant as explained above, the tenant is an “eligible tenant” and is entitled to receive relocation assistance.
Relocation assistance for tenants who rent a Single-Family Residences (SFF) is one month’s rent if the landlord is a natural person who owns no more than 4 residential units and an SFD on a separate lot. A landlord can deduct a tenant’s unpaid rental debt from the relocation assistance payment.
The CREM Group is a specialty real estate firm in Southern California that specializes in probate, trust, and bankruptcy real estate. These complex transactions often involve evictions and The CREM Group is experienced in handling these for our clients. Not too long ago, evictions were simple and inexpensive. But the eviction topic is now a moving target and requires more time, a high level of communication, legal acumen, and an increasing budget that’s less predictable. All that being said, The CREM Group stands by to assist you with complex real estate transactions that include evictions, and we’ll keep clear and open communication with you, so you understand what’s happening at every step. Get in touch with The CREM Group today if you have need of these services.
References:
LAHD Just Cause for Eviction Ordinance (JCO)
Ordinance No 187737
Relocation Assistance Bulletin
DISCLAIMER: This content is meant purely for educational purposes. It contains only general information about real estate and related matters. It is NOT legal advice and should not be treated as such. We recommend consulting a legal or tax professional before acting on any material, opinion, or point of view described herein.