By Ari Chazanas, Lotus West Properties
As with many industries and businesses, the pandemic has proven incredibly difficult for landlords and property managers who make their income from rent payments. But as tenants have been unable to pay, landlords have been forced to dip into their savings and other “rainy day” emergency resources to survive.
I’ve shared my insights on the difficulties that landlords and property managers would encounter because of the city and state mandates. Beyond the impact on property owners’ finances, the buildings they own have suffered because there’s little money left over for making necessary repairs and renovations. These reductions in expenses extended to staff layoffs and deferments on mortgage payments and other financial responsibilities. Additional fees were incurred on late payments for expenses such as utilities and insurance premiums.
Despite many eviction moratoriums being lifted and state restrictions expiring, eviction bans and rent deferral programs remain in the City of Los Angeles and Los Angeles County. Moreover, the federal aid programs put in place to help tenants and landlords with financial hardship have been overwhelmed with requests, resulting in extreme backlogs. So, payments to landlords aren’t being made in a timely manner.
The Evictions Bans and Moratoriums Still in Effect
As the COVID pandemic evolved, bans on evictions due to unpaid rent were put in place. Anyone who lost their job, had their hours reduced or incurred an increase in medical bills or childcare related to the pandemic was protected under the order. Today, these policies remain in effect, with the City of Los Angeles having no plans to lift them until the declared COVID emergency period is ended by the City Council. It’s unclear when that will ever happen.
Once current bans are lifted, though, there will still be restrictions. Landlords may only evict a tenant who fails to make rent payments in the months after the emergency period ends. Any missed rent payments within that period can’t be penalized. Under the city’s ordinance, for example, the tenant will have one year from the time the emergency period ends to make good on the debt that is owed.
Since October 1, 2021, portions of eviction ban in Los Angeles County (other than the City of Los Angeles) was lifted. But landlords are limited in their capabilities to initiate eviction proceedings against tenants who moved into the property prior to that date. A tenant who had submitted an application for rent relief through the Housing Is Key program was immune from legal evictions until July 1, 2022. However, a landlord can’t begin an eviction against any tenant who has failed to make rent payments prior to April 1, 2022, unless the landlord had submitted an application for rent relief. This is one result of the extreme backlog of applications being reviewed with the Housing Is Key program.
Four Options That Landlords May Consider Now
For landlords and property owners in Los Angeles who are struggling, it can seem like there are very few options available to help you get back on your feet. The Housing Is Key program was intended to give everyone a financial boost, but with the backlog of applications and the inability to submit new applications, landlords are looking for some actual relief. They should consider these four options.
1. Explore Some Unique Eviction Options
For landlords who own property outside of the city boundaries, evictions may now be initiated against a tenant for unpaid rent, bearing in mind the set of criteria that must be met. The landlord can evict if an application for rent relief was denied for the unit in question; if the landlord applied for rent relief but the tenant failed to do so; or if the tenant moved in, on or after October 1, 2021. However, this law doesn’t preempt any ban on evictions due to Covid from the dates of July 1 to December 31, 2022.
2. Consider if There’s a Basis for Legal Recourse
Some landlords have found alternate recourse in suing a tenant for the rent owed, even if that tenant is protected by an eviction ban. Of course, there are restrictions and limits to this alternative for both the tenant and the landlord. Don’t expect to get the rent owed during the COVID emergency period until the rent deferral period expires—which could be some time next year.
California has started allowing landlords to sue in small claims court and lifted the restrictions on the size of the claim brought for hearing. This is an option for landlords who own relatively few or small properties and rely on rent payments to survive. It’s important to keep in mind, though, that landlords are unable to charge interest or add late fees to the monies owed by tenants unable to make payments due to Covid from the period of March 1, 2020, to September 30, 2021.
3. Monitor the Evolving Status of the Bans and Moratoriums
The changes in which restrictions are being lifted or remaining in place are often happening without much advance notice. So, it’s vital to keep checking with your local representatives, health departments and courts. Find out when these changes do occur so you can take the necessary action when allowed. Landlords and property owners who stay vigilant and attentive to the latest updates in the laws can act quickly. Maintaining membership in an organization such as the Apartment Association of Greater Los Angeles will prove to be a valuable resource when it comes to staying updated on ever evolving regulations.
4. Keep Communicating Openly With Tenants
As always, the best course of action for property owners and landlords is to maintain an open line of communication with tenants. When landlords are upfront and honest with tenants, they’ll have the same courtesy toward you. When working together, solutions are often much easier to reach. Tenants typically want to be responsible and pay what is owed, and a good landlord is firm but understanding about back rent being paid and future payments being on time.
It may still be a difficult time for landlords and property managers to maintain their livelihoods as eviction bans and moratoriums persist. However, they’re not powerless. Pursuing any of these options can help them keep the lights on—for themselves and for their tenants.
Ari Chazanas is the Founder and Chief Executive Officer of Lotus West Properties, a boutique property management firm based in West Los Angeles. You can reach them at (323) 487-2650 or via email at firstname.lastname@example.org. Mr. Chazanas serves as a member of the Board of Directors of the Apartment Association of Greater Los Angeles.