By Ari Chazanas, Lotus West Properties
As with many industries and businesses, the pandemic has proven incredibly difficult for landlords and property managers who derive their income from paying rent. But as tenants were unable to pay, landlords were forced to dip into savings and other emergency “rainy day” resources to survive.
I shared my insights into the challenges landlords and property managers would face due to city and state mandates. Beyond the impact on owners’ finances, the buildings they own have suffered as there is little money left to carry out necessary repairs and renovations. These spending cuts have extended to layoffs of staff and deferrals of mortgage payments and other financial responsibilities. Additional charges were incurred on late payments for expenses such as utilities and insurance premiums.
Despite the lifting of many eviction moratoriums and the expiration of state restrictions, eviction bans and rent deferral programs remain in the City of Los Angeles and Los Angeles County. Additionally, federal assistance programs set up to help financially challenged tenants and homeowners have been overwhelmed with applications, resulting in extreme backlogs. Thus, payments to owners are not made in a timely manner.
Eviction bans and moratoriums still in effect
As the COVID pandemic evolved, eviction bans due to unpaid rent were put in place. Anyone who lost their job, had their hours reduced or suffered increased medical or childcare bills related to the pandemic was protected under the order. Today, those policies remain in effect, with the City of Los Angeles not intending to lift them until the declared COVID emergency period is ended by the City Council. We don’t know when that will happen.
Once the current bans are lifted, there will always be restrictions. Landlords can only evict a tenant who does not pay their rent within months of the end of the emergency period. Any rent payment missed during this period cannot be penalized. Under the city ordinance, for example, the tenant will have one year from the end of the emergency period to pay off the debt owed.
As of October 1, 2021, portions of the eviction ban in Los Angeles County (other than the City of Los Angeles) have been lifted. But landlords are limited in their abilities to initiate eviction proceedings against tenants who moved into the property before then. A tenant who applied for rent relief through the Housing Is Key program was protected from legal evictions until July 1, 2022. However, a landlord cannot start an eviction against a tenant who does not didn’t pay his rent until April. 1st 2022, unless the landlord has applied for rent relief. This is one result of the huge backlog of applications being reviewed under the Housing Is Key scheme.
Four Options Homeowners Can Consider Now
For struggling Los Angeles homeowners and homeowners, it may seem like there are very few options available to help you get back on your feet. The Housing Is Key scheme 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 real relief. They should consider these four options.
1. Explore some unique eviction options
For landlords who own property outside the city limits, evictions can now be initiated against a tenant for unpaid rent, keeping in mind the set of criteria that must be met. The landlord can evict if a request for rent relief has been denied for the unit in question; if the landlord requested rent relief but the tenant did not; or if the tenant has moved in, on or after October 1, 2021. However, this law does not prejudge any ban on eviction due to Covid from the dates of July 1 to December 31, 2022.
2. Determine if there is a basis for legal recourse
Some landlords have found another remedy by suing a tenant for rent owed, even if that tenant is protected by an eviction ban. Of course, there are restrictions and limitations to this alternative for both tenant and landlord. Do not expect to receive rent due during the COVID emergency period until the rent deferral period expires, which could be next year.
California began allowing homeowners to sue in small claims court and lifted restrictions on the size of the claim presented for hearing. This is an option for landlords who own relatively few or small properties and depend on rent payments to survive. It is important to bear in mind, however, that landlords are unable to charge interest or add late fees to monies owed by tenants unable to make payments due to Covid de la period from March 1, 2020 to September 30, 2021.
3. Monitor the changing status of bans and moratoriums
Changes in which restrictions are lifted or remain in place often occur without notice. It is therefore essential to continue to check with your local representatives, health services and the courts. Find out when these changes occur so you can take action when permitted. Landlords and proprietors who stay alert and aware of the latest law updates can act quickly. Maintaining membership with an organization such as the Greater Los Angeles Apartment Association will prove to be a valuable resource when it comes to keeping up to date with ever-changing regulations.
4. Continue to communicate openly with tenants
As always, the best course of action for landlords and landlords is to maintain an open line of communication with tenants. When landlords are upfront and honest with tenants, they will show you the same courtesy. By working together, solutions are often much easier to find. Tenants generally want to be responsible and pay what’s owed, and a good landlord is firm but understanding about paying rent arrears and future payments on time.
It may still be difficult for property owners and managers to maintain their livelihoods as eviction bans and moratoriums persist. However, they are not helpless. Pursuing any of these options can help them keep the lights on, for themselves and their tenants.
Ari Chazanas is the founder and CEO of Lotus West Properties, a West Los Angeles-based property management company. You can reach them at (323) 487-2650 or by email at [email protected]. Mr. Chazanas is a member of the Board of Directors of the Apartment Association of Greater Los Angeles.