Los Angeles Coronavirus Eviction Moratorium – What You Should Know

Los Angeles Coronavirus Eviction Moratorium – What You Should Know

Over two thirds of Los Angeles residents are renters.  As a result, the coronavirus eviction moratorium enacted by Mayor Garcetti is an extremely important order that will impact those renters and their landlords, as well as commercial tenants and their landlords.  We predict that the moratorium will allow many tenants to remain in their homes during the coronavirus pandemic, but those tenants will ultimately be unable to make up those missed payments as required by the ordinance, resulting in increased evictions and supply of rental properties upon expiration of the local emergency period.

Summary Of Los Angeles Coronavirus Eviction Moratorium

On March 15, Los Angeles Mayor Eric Garcetii announced a Public Order providing that no tenants could be evicted during the local emergency period, which at that time extended to March 31, if they could show inability to pay rent due to circumstances related to the coronavirus.  Tenants would have six months following that period to repay any back due rent.  After several amendments, on March 31 Major Garcetii signed City Ordinance 186585 detailing further protections for renters within Los Angeles.  That order remains in place today.

Ordinance 186585, or the “Eviction Moratorium”, provides that residential and commercial tenants may not be evicted for failure to pay rent, if the failure to pay rent is due to circumstances related to the coronavirus.  Those circumstances include loss of income due to COVID-19 related workplace closure, child care expenditures due to school closure, health care expenses due to being ill with COVID-19 or caring for a household or family member, or any other reasonable expenditure that stems from a government order related to the coronavirus.  Landlords also may not evict tenants based on the presence of unauthorized occupants, pets, or a nuisance related to the coronavirus.  The moratorium further prohibits “no-fault evictions” of residential tenants if the tenant or any member of the household is ill, in isolation, or under quarantine.  Finally, the order halts evictions under the California Ellis Act, which previously allowed owners of rent-controlled buildings to evict tenants to demolish the building or remove it from the rental market.

Tenants will have 12 months (3 months for commercial tenants) following expiration of the Local Emergency Period, which does not currently have a hard expiration date, to repay past due rent.  Landlords may not charge interest or late fees for rent that is not paid based on the Eviction Moratorium.

For a list of common questions and answers regarding the eviction moratorium, renters and landlords should refer to the Los Angeles Housing and Community Investment Department website, linked here.

How The Eviction Moratorium Is Affecting Landlords And Tenants

The eviction moratorium has already had, and promises to continue to have, a significant impact on renters and landlords alike in Los Angeles.  The moratorium is particularly important because over 2/3 of residents in Los Angeles are renters, according to a study by Zillow.

Between April 1 and 5, only 69% of renters throughout the United States had paid their rent, according to data from the National Multifamily Housing Council.  This data was concerning because during that same period last year, 82% of renters had paid their rent on time.  However, as of April 12, the number of renters who had paid their rent increased to 84%, which is much closer to the 90% of renters who paid their rent during the same period last year.  The data does, however, reflect a slight delay in rent payments this year.

It will be interesting to monitor this data in the coming months.  We predict that as unemployment figures continue to rise and tenants are forced to dip into their savings, if any, they will be increasingly reluctant to make timely rent payments.  We predict that the eviction moratorium will protect many renters, who may ultimately be unable to make up those late payments, and who will ultimately potentially negotiate a “walk-away” with landlords as they vacate their units after stay at home orders are lifted.  This will likely lead to an increase in the supply of units available for rent with landlords looking to recoup their losses, as well as an increase in demand as tenants are displaced.

For more information on how Esquire Real Estate Brokerage, Inc. can help you in the Los Angeles real estate market, feel free to give us a call at 213-973-9439 or send us an email at info@esquirereb.com.

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