Who Has Actually Benefited from the Eviction Moratorium?

Posted By: Frank Gallo Industry News,

For some of the more fortunate tenants, the State of California has taken over the obligation to pay rent of those who have applied for rental relief under the state’s “Housing is Key” program.  Unfortunately for landlords, however, the blanket protections approved by the Los Angeles County Board of Supervisors (Board) and which has been extended several times, had no boundaries and were imposed without any consideration whatsoever of the adverse impacts to all affected parties.  The County’s moratoriums on evictions and rent increases gave us no “wiggle room” and no exceptions, and they had been imposed without any regard to or in coordination with the party making-up for the rent payments - Sacramento (the State). This “blanket” measure had many unintended consequences. Here I discuss one of those cases.

When my tenant, who I will refer to as “Pat,” first presented herself, she appeared to be a sweet, older lady who was looking for housing for herself and a roommate.  Pat was moving into the home of an elderly couple who could no longer live there because of their mobility issues. The home was a three-bedroom, 1,550 square foot townhouse. Pat always paid her rent in a timely manner, never complained, and tried to avoid any visit by the landlord’s.  When Pat’s roommate moved out, Pat didn’t mention it to the landlord, nor did she say that any other people had moved in. Also, Pat had lots of furniture everywhere (so much furniture that much of it seemed unnecessary – more later).

By the end of 2020, both the original owners of the home Pat rented had died and in June 2021, the property was listed for sale.  Within a week of being notified of the sale, Pat told the elderly couple’s heirs that she had applied for COVID-rent relief and would not be moving out, nor would she pay any rent from then on.  According to Pat, she was unable to work due to impacts caused by pandemic and also because her roommate had moved out. The truth is, as we learned, that Pat didn’t have roommates, but she sure had her own tenants.  Yes Pat was subleasing the property, and all the “unnecessary” furniture was there for a reason - to create additional sleeping areas in the living room and in other parts of the home.

For years, Pat had rented houses merely to sublease them, and each time, she literally took complete control of the property to the point that every time, she ultimately had to get evicted.  Now, under the Los Angeles County eviction moratorium and state protections, Pat could legally avoid paying rent while subleasing the home in violation of the lease agreement.  However, what Pat did not count on is how unreliable the state’s rental relief program was and the difficulty of receiving payments.  

The state had no timeliness to follow or deadlines to meet for approval of applications for rental assistance, and after the first disbursement of rental assistance, the state had to “re-certify” the tenant, but it didn’t have enough people to administer and process such re-certifications.  So, in short, landlords were responsible for paying in a timely manner all their bills related to the property, but the State was not responsible for timely paying or in some cases, paying at all, the rent on behalf of those tenants who had applied.

In this matter, Pat stopped paying rent in June 2021 and in March 2022 (nine months later), the owner received the first and only payment issued by the state covering only one-third of past due rent owed, a mere three-months of rent.  In the meantime, the tenant, Pat, had been subleasing the property, and living without fear of an eviction due to protections put in place by the government, and at the same time, while demanding maintenance of the property for issues caused by Pat’s (sub) tenants.  To make matters worse, on March 31, 2022, the state stopped processing rental relief applications, and issued a notice asking tenants to start making rent payments as of April 1, 2022.  This decision by the state should have been accompanied by a revision of the Los Angeles County eviction moratorium, but that was not the case.  Unfortunately, the Los Angeles Board of Supervisors made no changes to the eviction moratorium.

The only choice that you would have had, if you were “sweet, old” Pat’s landlord would be to, well…. beg.  In fear of losing their property, the landlord heirs sent Pat a letter explaining the now difficult situation and asked her to “please” vacate the home.  The landlord, like most landlords, has his own family to support and the situation created by Pat was now unsustainable for him since no one would agree to buy the property with Pat and Pat’s tenants living as squatters, and with no chance of evicting the home’s occupants due to government-imposed moratoriums.  After all, if Pat was living there by herself, there was no need for her to be occupying a 1,550 square foot home. Additionally, Pat was getting retirement income and other aid from the state that her landlord was not getting.  As it could be expected, sweet, old Pat’s reply was: “I am protected by the law and Senator Portantino is helping me [so I am not moving out].”  Poor Pat’s landlord, indeed!

This case is just one of the many situations that are still happening because of the Los Angeles County’s blanket eviction moratorium and state protections.  These problems could be corrected by taking some simple direct measures: (i) create a County Board of Supervisor’s commission to determine the impact of the moratorium on all affected stakeholders, (ii) provide exceptions to the rule (because there would always be people trying to take advantage of situations like this that have been created by the government’s intervention), and (iii) have a coordinating mechanism with the party disbursing the money, in this case the State of California, to ensure the state is not being taken advantage of and deserving landlords receive badly needed funding.

Frank Gallo owns and manages rental property, and is a recent member in the Apartment Association of Greater Los Angeles.  He lives in the Los Angeles area.