Just cause eviction' proposal cause for serious concern

Issue May/June 2016 May 2016 By Jordana Roubicek Greenman

Small property owners continue to face an uphill battle in Massachusetts. On March 14, 2016, the Boston City Council held a public hearing on a proposal of tenant advocacy groups to amend the eviction laws and in essence, cap rents in the city of Boston. These groups, led by City Life/Vida Urbana, have been fighting for this new legislation (titled "Just Cause Eviction") as a result of gentrification and development. The March 14 hearing was attended by an overflow crowd of landlord and tenant groups, including a panel of three on each side of the dispute and hundreds of people interested in testifying.

Not only is the intent of the proposal eerily similar to Massachusetts' long-abolished rent control (eliminated by voter referendum in November 1994), the additional, burdensome and costly regulations of dubious public good will add an even greater hurdle to an eviction process that can already take anywhere between three months and two years.

In summary, the proposal includes:

  • a prohibition on evictions for non-payment of rent until a resident is "habitually late;"
  • a limit and possible prohibition on an owners' right to occupy his/her own unit for personal use or use by a family member;
  • a prohibition on evictions for property damage if a tenant agrees to a repayment plan for repairs whether or not the damage is ongoing and causes harm to others;
  • a limitation on evictions to those of "just cause" as determined by the city of Boston;
  • mandatory mediation with city-selected mediators for all lease expirations, prohibitions on terminations of tenancies-at-will and rent increases in excess of 5 percent;and
  • a provision that market tenants have the right to ignore their lease expiration date and remain in the apartment indefinitely.

As Attorney Jeffrey Turk correctly pointed out at the March 14 hearing, the suggestion that a market tenant should be able to remain indefinitely after the expiration of a lease flies in the face of basic contract law. Currently tenants routinely remain in properties as tenants at will after the expiration of their leases and landlords already face severe penalties for violating these leases.

The process of completing any eviction, especially one falling under the "no-fault" category, already includes ample protection for so-called "vulnerable" tenants. For instance, Chapter 239, Section 8A of the Massachusetts General Laws provides, in part, that in the event that a tenant can prove that he or she brought an adverse condition in the property to the attention of the landlord and said condition was not corrected promptly or said condition has returned, the tenant is entitled to remain in possession of the property.

Tenant advocacy groups have taken the position that large corporate landlords, real estate speculators and "flippers" are currently using the ability to commence a "no-fault" eviction as a way to push people out of their communities to make a bigger profit. As applied to the large corporate landlords, this position may in fact adversely impact low income tenants, and while the proposal presumably attempts to target all property owners/landlords, it is small and mid-level property owners who will suffer the most severe and detrimental impact if it were adopted - especially those already struggling to make investments worthwhile after incurring the costs of non-payment or other evictions. In my practice, I always advise clients that being a landlord in Massachusetts carries risks, responsibilities and requires capital for contingencies. However, it should not go unnoticed that every landlord offering housing to tenants unable to purchase his/her own property is serving the general public. Small landlords trying to build investments and communities should not be asked to shoulder the burden of a large scale "affordable housing crisis" that neither they nor their tenants created.

As a part of the "Just Cause" movement, tenants are being encouraged by groups such as City Life/Vida Urban and the Harvard Project to band together, stop paying rent, demand costly upgrades to apartments and plant signs on lawns and in windows informing the public that the tenants refuse to relocate. Again, this is largely a reaction to economic realities entirely outside of the control of landlords. As financial burdens increase (i.e., the cost of maintaining ones' property and/or expensive legal procedures), at some point, these private individuals will no longer be in the position to sustain ownership of affordable rental properties. No one will be left but large, corporate landlords with the financial wherewithal to do as they please -- including wholesale transformation of rental properties into market-rate condo units for sale.

Massachusetts laws currently include adequate safeguards to ensure no person is unnecessarily or unfairly evicted. For example, every Thursday the Boston Housing Court begins with a 10 to 15 minute lecture by the sitting judge explaining to everyone in the courtroom that there are dozens of lawyers and law school students standing by to speak to tenants about their case. The staff in each courthouse is required to inform tenants of the various "court service centers," where they will be directed to attend a free seminar hosted by either the Greater Boston Legal Services clinic or Harvard Legal Aid Bureau clinic. Once there, tenants will be advised to fill out preprinted forms on which they can check boxes to countersue the landlord and file discovery, which automatically delays the first hearing date by no less than two weeks. These preprinted forms also contain a demand for jury trial that, in the Boston Housing Court, can take between three and twelve months. Current Housing Court Standing Orders even eliminate the deadlines for filing, if a pro bono tenant advocate is willing to file a "limited appearance" on the date of the initial hearing.

The pressure caused by current economic conditions cannot be passed on to small and mid-level landlords. When a landlord is required to spend significant money on capital improvements, and sustain significant yearly tax and insurance increases, our system allows a raise in rent to offset the cost. The Just Cause Eviction proposal attempts to reintroduce rent control into the Boston housing market. Property owners will lose more property rights to the bureaucracy. With restrictions on rent, landlords may no longer have the financial ability to improve their properties, causing neighborhood deterioration. Furthermore, the proposed requirement that landlords engage in a non-binding mediation with tenants prior to initiating any rent increase will inevitably place strains on landlord/tenant relationships -- turning what should be friendly and personal relationships into hostile and adversarial ones. Mediation is already encouraged by the Boston Housing Court and available to all litigants with an active case.

An analogy to the lead paint laws is appropriate. There is no question that lead paint poisons children. There is little question that lawmakers had little or no sway over paint companies, builders who were long gone, or banks taken over by the FDIC. Politically, the best lawmakers could do was hold landlords liable. In the immediate days after lead paint was banned, larger owners could tap their insurance coverage without much damage to their businesses, but small owners were effectively put out of business because of strict liability.

It is always easiest to lay the most blame on the person who is most readily available, and appears one step ahead in the pecking order. Yes, there is a housing crisis; yes, increased homelessness presents a public safety and public health issue. Whether or not housing is a right is a public policy issue, and to date this country has chosen not to deem it as such. Until such time, no one has the right to live in another person's property without complying with lease rules within the bounds of the law and standards that are "commercially reasonable" for residential property. To overburden the small/mid-level owner, regardless of which side you are on, only avoids the bigger issue of who benefits from the increasing stranglehold the law puts on small landlords. They are a small business, not a monopoly. They are keeping housing local, not changing neighborhoods by wholesale removal of its residents. In some ways, small landlords have as yet unexplored common ground with tenants. Both are fighting over something relatively small, and that fight keeps both from viewing and attacking the larger questions of housing, and more important issues in this country including housing policy. Until larger economic and societal issues at the root of the housing crisis are rectified by policy changes, we will continue facing these challenges in the rental property market. However, expanding the existing laws and regulations that already provide adequate protection for tenants is not a forward-thinking solution and will only exacerbate the problems