City of Los Angeles Moratorium and Renter Protection Updates
As a follow up to our previous City of Los Angeles update released on February 1st, the two ordinances below have been formally adopted by the City Council. The Association fervently opposed the adoption of both ordinances.
Monetary Threshold - Evictions for Non-Payment of Rent on All Types of Rental Units
At its February 3rd meeting, the Los Angeles City Council adopted an ordinance that will restrict a rental housing provider's ability to evict for non-payment of rent unless a renter owes in excess of a monetary threshold whereby “the amount due exceeds one month of fair market rent for the Los Angeles metro area set annually by the U.S. Department of Housing and Urban Development for an equivalent sized rental unit as that occupied by the tenant.” For fiscal year 2023, the Fair Market Rent is $1,747 for 1-bedroom unit and $2,222 for 2-bedroom unit. This ordinance affects all types of rental properties within the City, including RSO properties, non-RSO properties, accessory dwelling units (ADUs), single-family residences, and condominium units.
Council Member Traci Park was the lone voice of reason to vote against adoption of the ordinance on second reading while Council Members Krekorian and Price recused themselves due to a conflict of interest due to ownership of rental properties. It was no surprise that Council Members Soto-Martinez and Raman, both renters, failed to recuse themselves and instead voted for adoption although they have a clear conflict of interest.
Relocation Fees Following Certain Rent Increases
The Los Angeles City Council adopted an ordinance, that will require property owners to pay substantial relocation assistance and moving costs to renters who choose to end their tenancy after a rent increase. The ordinance states that if a renter decides to vacate following notice of an increase in rent by more than the lesser of (i) the Consumer Price Index (CPI) plus five percent or (ii) ten percent , a property owner is then required to provide relocation assistance in an amount of three times the fair market value in the Los Angeles Metro area for a rental unit of a similar size plus an additional $1,411 in moving costs. This ordinance is applicable only to rental properties within the City that are not subject to the City’s (local) RSO or to state rent control under Assembly Bill 1482, and accordingly, properties subject to this ordinance include newer construction built within the past 15-years, single-family residences, condominiums and accessory dwelling units (ADUs).
Council Member John Lee justifiably voiced his frustration with the continued avalanche of restrictions being placed on the City’s rental housing providers. Lee highlighted in his comment that the focus needs to be on finding ways to keep small, “mom-and-pop” housing providers in the City of Los Angeles, not further restrictions that continue to tip the scale against property owners. Instead, we continue seeing the adoption of policies that place extreme financial hardships on rental housing providers making it almost impossible for them to viably operate in the City of Los Angeles. Council Member Lee’s words of a fair and balanced approach unfortunately (and unsurprisingly) fell on deaf ears with most of the City Council. Council Member Lee was joined by Council Member Traci Park in bravely voting against the adoption of the ordinance.
Summary of Other Recent Los Angeles City Council Actions
The following are other recent ordinances passed by the Los Angeles City Council impacting owners of rental properties within the City.
End of Eviction Moratorium
In January, the Los Angeles City Council adopted an ordinance that ended the City’s nearly three yearlong eviction moratorium as of January 31, 2023, with some exceptions, and as of February 1st renters must pay their current monthly rent due.
While the eviction moratorium generally ended on January 31st, certain restrictions continue to remain in place beyond January 31, 2023. Among the restrictions that will continue are evictions based on the presence of unauthorized occupants or pets necessitated by COVID-19 which will remain prohibited until January 31, 2024, and will require that the rental housing provider serve a 30-day notice to cure prior to issuing a tenancy termination. Ellis Act evictions will also remain prohibited until April 1, 2023. After January 31, 2023, no-fault evictions to install a resident manager will be limited to circumstances where an onsite manager is required by law or the terms of a regulatory agreement unless a prior declaration of intent to evict for resident manager occupancy had been submitted to the Los Angeles Housing Department (LAHD) before March 4, 2020.
A renter must repay any COVID-19 back rent owed as follows: (i) rent owed from March 1, 2020 to September 30, 2021, must be paid by August 1, 2023, while (ii) rent owed from October 1, 2021 to January 31, 2023 must be paid by February 1, 2024. Finally, with the end of the City’s COVID-19 local emergency on February 1, 2023, there is now a definitive end date for the expiration of the City’s rent increase freeze, which is set to terminate as of January 31, 2024.
Please note that on January 24th, the Los Angeles County Board of Supervisors adopted, by a vote of 3-1, with Supervisor Barger voting in opposition and Supervisor Mitchell abstaining, an extension of the existing Countywide eviction moratorium for an additional 60-days through March 31, 2023. It is the County's position that their eviction moratorium applies to both the unincorporated areas and incorporated cities within the County. We encourage our members to consult with an attorney as to the impact of the County's extension on properities located within the City of Los Angeles.
“Universal Just Cause” - Just Cause Eviction Provisions for Non-RSO Units
During January, the Los Angeles City Council also passed an ordinance that expands the City’s RSO just cause evictions requirements to the City’s non-RSO rental units, including new construction, single-family homes, ADUs and condominiums following the expiration of an initial lease or the first six (6) months of continuous and lawful occupancy, whichever comes first. Under the new “Universal Just Cause” ordinance, permissible and no-fault evictions are now limited to only those reasons specified in the ordinance and requires that rental housing providers pay significant relocation fees.
Relocation fee amounts are determined based on the length of tenancy with additional relocation fees to be paid to qualified renters (e.g., seniors, disabled). Smaller rental housing providers, as defined in the ordinance, “who own no more than four dwelling units and a single-family home on a separate lot in the City of Los Angeles” and where the rental is a single-family home would be subject to a reduced relocation fee equal to one month’s rent that was in effect when the written notice of tenancy termination was served. The ordinance also includes noticing and notice posting requirements and imposes civil penalties on rental housing providers who fail to pay relocation fees that include damages based on the amount of relocation fee that had not been paid, reasonable attorney’s fees, and costs as determined by the Court. Ordinance violations can be a misdemeanor. Additionally, the ordinance also amends the City’s existing RSO provisions and will now require that housing providers file a copy of any written notice to terminate a tenancy with the Los Angeles Housing Department within three (3) business days of service on the renter. (No specified procedure for filing the required notice with the City has yet been devised.)
This article is for informational purposes only. If you have any questions regarding your property or specific tenancies and the requirements of any local law changes described herein, please consult with an attorney.