Many real estate owners in California may be aware that in June 2020, the Apartment Association of Greater Los Angeles filed a lawsuit against the city that challenged the eviction ban, the prohibition on late fees, the ban on imposing of interest on unpaid rent, and a moratorium on annual rent increase.
In November 2020, the U.S. District Court for the Central District of California ruled in favor of the city. The following month, the AAGLA filed an appeal at the U.S. Court of Appeals for the Ninth Circuit. In August 2021, the Court of Appeals ruled that the moratorium provisions were appropriate and reasonable, considering the nationwide health crisis.
Relevance for real estate owners and developers in other cities
Although the Los Angeles lawsuit would not have an impact on the moratoriums announced by other cities in California, it did have the potential to be a trigger for similar lawsuits in other cities. For example, in Pasadena, a local moratorium protects tenants from eviction during the course of the health crisis. These tenants need to clear all outstanding rent within a period of six months from when the health emergency comes to an end.
While tenant associations hailed the ruling, the AAGLA’s executive director said that they will appeal the decision and if required, they will go all the way to the U.S. Supreme Court.
End of the California eviction moratorium on September 30th
The money earned from renting is often an important source of income for many real estate owners and developers. Therefore, when even a defaulting tenant cannot be shown the door, it may prove to me a major financial challenge for real estate owners and developers.
As many people will be aware, on September 30th, the California eviction moratorium came to an end. With that, real estate owners and developers are once again permitted to take tenants to court over unpaid rent. However, taking a tenant to court may sometimes prove to an arduous task, which may become somewhat simpler if the right guidance is sought.
