An eviction disaster is coming, housing legal professionals warn

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An eviction crisis is coming, housing lawyers warn

Landlords & tenants

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Almost six months after a pandemic that upset American society, a San Diego real estate owner has signed a contract with a tenant: take $ 10,000 and get out.

A 60-day eviction notice expired while the courts were closed, and the city's new emergency restrictions gave the tenant significant leverage: his landlord couldn't get a subpoena until September 30th at the earliest, and in the meantime, the renter hasn't been It is not legally required to pay him anything. The landlord's attorney, Rachael Callahan, told him the key-for-cash deal was his best immediate option if he wanted to regain access to his property in time.

"The conversation I have literally 20 times a day is," Here we are. “The customer says, 'This is amazing,' and I agree with them,” says Callahan, who is based in San Diego. "In our view, one of the most frustrating things is not being able to help our clients because we are lawyers, and we should."

In Houston, Kent K. Motamedi landlords were able to file evictions for weeks after Harris County failed to put its own eviction restrictions in place to replace federal Coronavirus Aid, Aid and Economic Security Act or a statewide eviction moratorium that expired in May.

The new state restrictions announced by the Centers for Disease Control and Prevention last week, as well as a new order from the Texas Supreme Court, have slowed Motamedi's work, but not entirely stopped it. Still, many are reluctant to evict, "as most feel it is next to impossible to evict if it really only prolongs the process, if at all," he says.

“Overall, the disputes between landlords and tenants are more difficult to deal with, and these restrictions and / or job losses are causing more and more people to become frustrated, both from a tenant and landlord perspective,” says Motamedi.

The evolving patchwork of pandemic policies that has gripped the U.S. housing market has placed tenants and renters across the country in similar states of uncertainty as experts warn of an impending eviction crisis that will increase homelessness everywhere. Restrictions related to pandemics change frequently and sometimes vary widely by jurisdiction. However, the long-term effects of an eviction are largely universal: An eviction record can make securing new homes considerably more difficult.

"The eviction is an incredibly traumatic event that affects every area of ​​life, livelihood and well-being of a family," said Emily A. Benfer, director of the Health Justice Advocacy Clinic at Columbia Law School and chairman of COVID-19 of the American Bar Association Task Force Committee on Eviction.

The new federal order

The CDC's new federal ordinance, September 4 through December 31, prohibits the payment-related eviction of tenants who declare incomes less than $ 99,000 for singles and $ 198.00 for couples under the penalty of perjury for COVID-19 and COVID-19 a vulnerability to homelessness or overcrowded housing if they are evicted. They must also prove that they have sought government help with paying the rent.

The new restrictions were revealed approximately one week after the CARES Act expired and do not apply to jurisdictions with their own (at least equivalent) requirements such as California.

A sign outside an apartment complex reminding you that the rent is dueDespite the COVID-19 pandemic shutdown, a sign in the parking lot of an apartment complex in Bossier City, Louisiana, reminded tenants in March: "Rent is due on the 1st." Photo by Allen J. M. Smith / Shutterstock.com.

Some jurisdictions, such as San Francisco, have stricter restrictions that still apply. Others, including Texas and Alabama, have expired, and in some states, including Arkansas, Georgia, and Oklahoma, the only protection available is the new federal ordinance. And for some renters at the start of the pandemic, "the only thing that kept them from certain evictions was the fact that the court was closed," said Ugochi L. Anaebere-Nicholson, senior attorney for the Public Law Center in Santa Ana, California.

Tenants have gathered across the country, including in San Diego, where Patricia Mendoza, a single mother of two who has lived in fear since losing her job, spoke outside the downtown courthouse. She said she waited months to receive unemployment benefits and her bills kept rising.

"Millions of people in my shoes are currently living in fear and it is not right. … We need help; we need help," Mendoza shouted through a megaphone during the rally on August 27. "I have to help my children. If we are evicted will, me and my children, we will camp in one of these tents and I don't want that. "

Rafael Bautista, co-director of the San Diego Tenants Union, says landlords continue to file evictions for other reasons. "They bet that the tenants do not know their rights and then have no legal representation," says Bautista.

A dormant eviction crisis

The individual stories pose a much bigger problem, says Stacy Butler, director of the Innovation for Justice program at the University of Arizona’s James E. Rogers College of Law.

“The really terrifying story here is the magnitude of the impending eviction crisis – ten times our historical eviction rate. People do not understand the ripple effect this evacuation crisis will have. It's so much bigger than people who lose their home, ”says Butler. “It will revive the real estate market and devastate entire communities. Decision-makers need to think about massive rent relief strategies. "

The new CDC regulation "is an immediate stopgap," Butler adds.

“While people are staying during the pandemic, tenants continue to face late rents, fines, and costs associated with not paying rent. If the moratorium is lifted, tenants will continue to be financially responsible for the costs incurred, ”she says. “Eviction moratoriums must be coupled with rent support and mortgage leniency in order to stabilize the real estate market. The CDC decision does not reduce the pending evictions, it merely delays them. "

The CDC order provides for evictions for reasons other than lack of pay, which lawyers say can be easily abused.

The man holds his head in his hands while looking at an eviction notice

Anaebere-Nicholson says disgruntled landlords are harassing some tenants. Other lawyers say they heard of landlords issuing fake lockout orders to trick non-paying tenants into leaving.

And tenant attorneys seem to be taking an increasingly aggressive approach in their calls for widespread leasing: A video posted on social media on August 21 shows protesters preventing landlord's attorney Wayne M. Abb from closing a Los Angeles County courthouse enter, in which evictions take place. It will not be processed, but can still be dropped while "Wayne go home" is being sung.

"I think that's a testament to the extreme desperation people are experiencing in the real estate market," says Benfer. "The problem here is that the federal government has not yet responded with meaningful and solid legislation to address a fully preventable crisis that we will pay for well into the future."

Benfer's clearance committee helped draft Resolution 10H, which was approved by the House of Delegates during the ABA annual meeting in August, and urged federal, state, and local governments to provide rental assistance and the use of COVID-19 clearance records to prevent when reviewing tenants. It also helps mobilize the pro bono bar to defend renters displaced during the pandemic.

In a July letter, then ABA President Judy Perry Martinez urged Congress "to prioritize the stability and security of homes" as protection programs expire. "The pandemic has exacerbated and accelerated the real estate crisis that already existed in the US," warned Martinez. "The sharp drop in rent payments will have a devastating impact on the real estate market, especially among small homeowners who lack the financial ability to sustain short- and long-term rent defaults."

Martinez called on Congress to allocate funds to assist the most vulnerable during the crisis and promoted S. 3030, a law that provides housing-specialized municipal housing courts to address local issues.

In September, current ABA President Patricia Lee Refo renewed Congress's call from July to help with the housing crisis. She demanded easing of rent and foreclosure, added to the CDC's eviction moratorium of September 4, and described the moratorium as "temporary and incomplete" remedy, since it does not include federal rent support, which is intended to cover the rising rent debts and the costs of the landlord is required. "

The new CDC regulation means all of the country's nearly 44 million rents are protected, while the CARES bill only covers properties that are backed by federal mortgages, about 28% of that, according to the Urban Institute, an economic think tank in Washington , DC. The associated rents were covered by local restrictions that largely halted evictions due to insufficient payment. Some states, like California, went further and stopped processing all evictions except those related to public health and safety. This included evictions through no fault of their own, which Anaebere-Nicholson said prevented landlords from evicting non-paying tenants after their leases had expired.

While the courts stopped processing and serving evictions, attorneys continued to file them during the pandemic. And some states, including Alabama, stopped processing evictions only for non-payment. That moratorium expired on May 1 and resulted in a "big upward trend," says Farah Majid, executive attorney for Legal Services Alabama in Birmingham.

Eviction notice on a door

Majid's staff help clients navigate the court system, try to ensure landlords are complying with the law, and ensure more time for negotiations and payments. But Majid says: "Often there are money problems and they only have the rent, and unfortunately that is nothing we can do anything about."

So far, the new CDC regulation has not stopped evictions, and landlords are "just trying to find a way out". Renters are also required to complete a government-provided registration form, which Majid said "is definitely an extra hurdle".

Some see Alabama's boom as a microcosm of an impending national crisis. But in many places the boom experts have not issued any warnings since March. Princeton University's eviction lab is tracking evictions from the pandemic in 17 cities, and all but one – Milwaukee – were evicted less than average in June and July. Those numbers don't include renters who have chosen "rather to leave than constant harassment or constant pressure to pay a rent they just can't afford," Anaebere-Nicholson says.

The declines were also due to unprecedented restrictions, including the CARES Act. Once those are over, "the only thing that really slows down (evictions) is just the sheriff's physical capacity" to serve them, says Eric Dunn, litigation director at the National Housing Law Project.

Other areas saw similar increases as in Alabama. Houston recorded 618 evictions in April, compared with a 2012-15 average of 3,876 in April. After the Texas Supreme Court allowed evictions to resume in May, evictions in Houston rose to 2,483 in June and 2,252 in July. And at that time the CARES law was still in force.

Some Texas counties imposed local eviction moratoriums after the nationwide eviction ended. But Harris County didn't, and Houston Mayor Sylvester Turner refused to implement his own. However, Turner has ordered a rental assistance program designed to send $ 20 million to needy tenants injured by COVID-19. Houston landlords who accept the money won't be able to evacuate anyone on the property until September, even if there are multiple renters on the lease who haven't paid yet.

The CARES Act funded $ 15 million, and Turner urged Congress to pump more money into the cause.

"Cities can't do it alone," Turner said at a press conference on August 5th.

Now Houston is subject to the new CDC order although the rental assistance program remains in place. In California, Governor Gavin Newsom said last week that the CDC regulation does not apply there because a new state law is stricter. Legislators passed it Monday night, hours before courts were due to start processing evictions again after a delay of nearly five months.

The new California law has no qualifying income limit, but requires renters to pay 25% of rent due by January 31st. It prohibits evictions for unpaid rents that began in March 2020, but it allows landlords to sue tenants in small claims court to reclaim debts as of March 1, 2021. It also allows tenants to under their pandemic financial plight Declare the penalty of perjury. The new bill was a compromise between Governor Newsom and stakeholders, building on an earlier bill that received so much attention that hundreds of callers crashed a legislative phone line to comment.

Another bill suggests tax credits for landlords to offset unpaid rent. However, this does not immediately help owners who rely on cash flow real estate face other costs.

Landlords carry a heavy burden

"People are pretty unhappy with the concept of renters being able to live for free, and that's not too surprising," said Andrew M. Zacks of Zacks, Freedman & Patterson, in San Francisco.

Zacks is currently appealing the upholding of a March city ordinance by a San Francisco Supreme Court judge that prohibits evictions and non-payment fees for six months after the state of emergency ends. Tenants would still owe rent, but they cannot be evicted if they do not pay.

In Arizona, Attorney Kory Langhofer of Statecraft represents real estate companies and stakeholders, including the Arizona Multihousing Association, on a Supreme Court petition against the statewide moratorium. Like Zacks, he argues that the law amounts to a public takeover of its customers' property.

The eviction notice slipped under a door

A similar lawsuit challenging the Los Angeles restrictions is being brought before the US District Court. Daniel M. Bornstein, a San Francisco real estate attorney, says his clients feel that "the heavy lifting was carried by one class of people at the expense of others."

The problem includes student housing and extends to large commercial leases, says Jason M. Stone of Stone & Sallus in Manhattan Beach, California.

Stone said one of his clients, who owns properties near the Staples Center, is trying to negotiate leases with restaurants and other businesses that have been devastated by the pandemic. Another owns a property rented from a 24-hour gym that has filed for bankruptcy. The gym gave its landlord a take-it-or-leave deal: 33% of the amount owed, "or stand in line for bankruptcy," says Stone.

"It's an impossible situation and the timing and delays in court have really put customers in a difficult position," added Stone. "How do you negotiate when you don't know what's going to happen in three months, let alone three years?"

Still, Stone says that many of his customers "are pleasantly surprised that they are collecting more rent than expected".

"It's the landlords and tenants who communicate," says Stone. "That will lead to much better results."

Callahan said the $ 10,000 key-for-cash deal recently brokered by a customer would have been inconceivable months ago.

"I think the owners just want to feel like it's not all theirs," Callahan says. "I understand from the standpoint of people trying to fix the problem that they don't have many options either. But the reality is, they had six months."

Benfer, who works with Princeton's Eviction Lab, says a national rental assistance program needs to be created to help not only tenants but landlords as well.

"The persistent non-payment of rent creates a cascade of negative effects on both owners and communities," she says. "All of this leads to increasing societal costs that are shared in the community and placed on all of our shoulders."

Dunn agrees. "This is an area where I think landlords and tenants are really aligned," he says. "Both of them need an aid package to rent."

Meghann Cuniff is a California-based journalist reporting for the Washington Post, the Orange County Register, the Los Angeles Daily Journal, the Idaho Statesman, and the Spokesman Review. She earned a bachelor's degree in political science and journalism from the University of Oregon. Follow Cuniff on Twitter at @meghanncuniff.

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