Oakland’s version of rent and eviction relief during the coronavirus pandemic

The City has been delayed in enacting an eviction moratorium, but what it lacks in timeliness it makes up for in teeth.

Oakland City Council got the memo on social distancing, as the council participated in a special meeting held through online video conferencing on Friday, March 27 to hammer out the details of its version of an emergency eviction ban to protect cash-strapped renters who are unable to pay the rent because of a COVID-19-related hardship.

Before we delve deeper into Oakland’s moratorium and provide some context, here are some key highlights:

› At least until May 31, landlords cannot evict tenants unless there is a health or safety threat to other occupants.

› Landlords cannot increase rent by more than the consumer price index of 3.5 percent.

› Landlords cannot charge late fees for rent missed during the pandemic.

› Even after May 31, landlords cannot evict tenants for rent owed during the period extending from now until May 31 if the tenant is unable to pay rent because of a hardship attendant to the coronavirus.

It's not an easy read, but the cerebral types can read the unabridged ordinance here.

The meeting was highly anticipated by nervous rental property owners and their advocates because the City was vocal in floating ideas that were more restrictive than the eviction moratoriums other Bay Area municipalities have enacted in response to the coronavirus outbreak. The concern was that emboldened by its newfound police powers afforded by Governor Newsom’s Executive Order, the City would be given an inch and take a mile.

What is a hardship anyway?

The spirit and the letter of eviction bans, of course, is to protect tenants from being victimized twice by being displaced after experiencing an economic fallout as a result of coronavirus.

Yet, eviction moratoriums throughout the Bay Area have been broadly worded to encompass a wide range of potential consequences a tenant could suffer as a result of the pandemic, raising the question of who can claim rent cannot be paid. The argument can be made that literally everyone has been impacted by COVID-19.

Oakland has delineated three sets of circumstances in which landlords may not impose late fees.

(1) the tenant was sick or incapacitated due to COVID-19, or was complying with a recommendation from a governmental agency to self-quarantine,
(2) the tenant suffered a substantial reduction in household income because of a loss of employment or a reduction in hours, or because they were unable to work because they were caring for their child(ren) who were out of school or a household or family member who was sick with COVID-19, or because they were complying with a recommendation from a government agency to self-quarantine, or
(3) the tenant incurred substantial out-of-pocket medical expenses caused by COVID-19
We think that while landlords can make a cogent argument that certain tenants should not be entitled to protections when there are no financial repercussions from the public health crisis, these cases would probably fall on deaf ears and, at any rate, we have urged compassion and deference when interfacing with tenants during these challenging times.

There is an obscure exemption to the strict rent increase caps, namely that a greater increase is required “to provide a fair return.” It’s advisable in every season to consult with an attorney before tinkering with rent amounts, but even more important now.

The law anticipates some obstruction on behalf of the landlord

The moratorium equips tenants with an eviction defense when the landlord impedes the flow of funds from third-party, non-profit organizations which come to the aid of renters. In order to provide financial assistance to tenants, these entities must glean a bit of info from the landlord. If the landlord fails to accept rent payments from good-hearted people who offer a hand up, or if they do not volunteer W-9’s and other necessary information requested, it may render an unlawful detainer unsuccessful. We advise landlords to welcome these organizations with open arms and indeed, refer tenants to outside help.

The timing of Oakland’s action was impeccable.

As the council was congregating online, Governor Newsom issued a second, more finalized Executive Order. This order creates a 60-day moratorium on evictions statewide, but in a give-and-take between the landlord and the tenant, the Governor’s order requires tenants to declare in writing that they cannot pay all or part of their rent due to COVID-19.

When tenants state that they cannot overcome the hurdle of impending rent, they must provide documentation that substantiates economic hardship due to the public health crisis. While supporting information must be produced, they need not submit it to the landlord in advance. It’s further incumbent upon the tenant to repay the full rent “in a timely manner” Further, the tenants are not immune from eviction after life returns to normal and the moratorium is lifted.

We hasten to say that this clarity on the state level is helpful for municipalities that have not yet enacted their own eviction bans, but it is the prerogative of local governments to usher in more rigorous protections, and Oakland is a case in point.

Some parting thoughts

Although eviction moratoriums in other locales have been rather bland and perfunctory, Oakland has packed quite a lot into theirs and leaves quite a lot to interpret. There is even a riveting email thread going on among us competing landlord attorneys in an attempt to make sense of it all, but we do not want you to get lost in the weeds.

Suffice it to say, the law is always cleaner on the page than it is in real life, and that there are some issues that will have to be aired out. Especially so here.

Owners and managers of Oakland properties will be cast into a regime just as novel as the virus itself, but you can absolutely count on the informed guidance of Bornstein Law to come out ahead.