Law requiring fee paid to evicted tenants is upheld
A federal appeals court has upheld a California law requiring a property owner who legally evicts a tenant to pay one month of the tenant's rent in order to reduce the costs of relocation.
The law, sponsored by thenAssembly Member David Chiu, D-San Francisco, took effect in 2020. In addition to limiting rent increases to 10% a year in areas without local rent control, the law provided some financial assistance to renters who were evicted because the owner was moving into the property, converting it to a condominium or demolishing it. The owner must either repay a month's rent to the tenant or cancel the final month's payment.
A lawsuit by the owners' group Better Housing for Long Beach accused the state of unconstitutionally confiscating their property by requiring the payments. But while the suit was pending, the Ninth U.S. Circuit Court of Appeals upheld an Oakland ordinance, similar to laws in San Francisco, San Jose and Los Angeles, requiring property owners to pay all of a legally evicted tenant's relocation expenses.
The court noted that the owners had chosen to evict the tenants, and that the Supreme Court has upheld the government's authority to impose property-related fees, such as property taxes, and fees related to an owner's use of the property, like the costs of cleaning up hazardous wastes. On June 6 the Supreme Court left the ordinance intact by denying review of the owners' appeal.
The relocation rules of the state law are “nearly indistinguishable” from those that were upheld in Oakland, a three-judge panel of the appeals court said Friday.
Paul Beard, a lawyer for the Long Beach property owners, had argued that the law was a “forced transfer of hardearned funds” and that the state “cannot force owners to bear public burdens” that should be paid by the general public, such as the relocation costs of legally evicted tenants.
But the court said California is not confiscating private property, just requiring assistance by owners who made the decisions to rent the residence and later to evict the renters. The state is not denying any government benefit to the owners or interfering with their control of their property, the court said.
The panel consisted of Judges Morgan Christen and Johnnie Rawlinson and U.S. District Judge Richard Bennett of Maryland, temporarily assigned to the appeals court.
Beard said his clients were disappointed and were evaluating their next steps. They could ask the full appeals court for a new hearing before a larger panel or appeal to the Supreme Court.
He said the payment required by the California law is “more closely connected” to the owners' property interests than the Oakland ordinance because it is based on the rental value of the property, and not the renter's relocation costs.