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Moratorium Mayhem – LA’s Eviction Scene, with Attorney Richard Marker

by Paul Dashevsky
November 8th 2022
00:30:28
Description

Hosts Paul and Sara welcome attorney Richard Marker to discuss the upcoming end of the Covid eviction moratorium in Los Angeles. We learn how the moratorium affected both ... More

Welcome to the L. A. Realtor podcast. I'm paul with great belts and I'm Sarah with glen oaks escrow and we're getting to know the industry one conversation at a time. Hey there. Welcome everyone. Welcome to LAR Pop say hi sarah. Right hi. We still have a disagreement about if we're calling it what is large stand. L. A. Realtor podcast is large for short term of endearment I suppose. Yeah, you can call me anytime you want. Just that's fine. Anyways, welcome. So today I'm pretty excited. We have somebody on that. I've been wanting to talk to. He's especially, especially nowadays with what's happening in the city. Um, he is an eviction attorney and he's gonna share with us all the, all the new information about the moratorium and whatnot. Welcome Richard marker. Good morning guys. Good morning. Thanks for being Here. Richard, I'd love to learn start with a little bit about yourself. I'm looking at your bio here. According to this, you've been practicing for 35 years and you're one of the most versatile and respected real estate attorneys in southern California.

I certainly believe that. But tell us about yourself. Tell us about your practice. I appreciate that. Thank you. Yes. Been practicing for 35 years. I am a native angeleno in uh, if that's such a word. Um born and raised in Los Angeles uh went to school, both high school college and law school in the Los Angeles area. My practice is generally real estate and business. I do a lot of landlord tenant fiction work for my clients who like to have somebody to handle all of their their work, not just a niche situation. So we're, we're from a landlord tenant side. I wouldn't call us a mill, but we do a lot of the landlord tenant work and then we also do a lot of the heavy lifting with transactional real estate and more complex litigation. Great. And your uh, you happen, it looks like you happen to have one partner, your green and marker and his name is Richard. Your name is Richard. Exactly. And you got to be richard to work here.

Couple of richard's. All right, fair enough. Okay, look, I would love for you to start with this moratorium thing. Right, correct me if I'm wrong, this eviction moratorium in L. A. I think it's L. A. City. You can correct me again wherever I'm getting this incorrect is about to end. I think february 1st after what I think is almost three years. And uh, am I also correct in saying that this might might be the longest moratorium in the country. So you just, you just tell me what's right there. What's wrong? Okay, so, so in California, we, we have the unpleasant, uh, I guess recognition that we have had in the city of Los Angeles, probably the most restrictive moratoriums involving covid. And as it relates to the landlord tenant world. When the covid First started in March of 2020, you had a variety of jurisdictions. You had the state of California, you had the federal government with their moratoriums, you had the county of Los Angeles.

If you're living in Los Angeles area and then you had of course the city and with that, you've got the sheriff's department, you've got the courts, so you've got all of these different jurisdictions having rules and it was, it was brutal to try to to keep track of everything because it was, it was a constant in constant flux. You're referring to the city of Los Angeles moratorium that about two weeks ago, three weeks ago, city council met and voted to basically end the Los Angeles city moratorium on evictions. And the big picture is, yes, we have a bright line, it is january 31 or february one, but we are still waiting for the city attorney to draft the actual ordinance. So we don't know whether there's going to be the ability to terminate somebody for, let's say a november 2022 rent obligation that's not paid or whether that will be lumped into the consumer debt pile.

And we start with february one rent as being the real first nexus of, of rent That is going to be the subject of a more of litigation. And let you know that the county of Los Angeles has already retracted their moratorium to a certain degree. So as an example April May and June of 2022 rent that's live that that is, that is something that is subject to eviction. However, not in the city of Los Angeles. So you've got county first, then you've got the individuals cities. So in areas that are not submit to a city ordinance and you're in the county of Los Angeles, you can proceed, there are conditions if a tenant gives you a within seven days of rent being due in the county, they give you a declaration advising. Yes, I'm covid affected then landlord is stuck. You're not evicting for that. Starting in june april May and june we're just the covid declaration july august and going forward, tenant has to give not only the covid declaration but also a self certification that they are with below the 80% of the mean income for the area that they are in.

And that two pronged test is what will basically stop a landlord from a victim. So again, landlord in Beverly Hills as an example, doesn't get those notices, doesn't get those declarations self certification. They can proceed right now and talking about going back three years and you've dealt with probably many landlords and many tenants are there folks that literally haven't paid rent in three years. Is that even possible that they're kind of still kind of living large here in L. A. Absolutely. I've got lots of clients that have lots of tenants that have taken full advantage of the moratoriums. You've got tenants who have jumped all over the state subsidy. The housing is key subsidy and have had a huge chunk of their rent paid for them by the state. You have those who and that by the way, ran out on March 31 of this year. So there is no, there is no subsidy for April May June and going forward.

But yes, you have people who have stopped paying rent effective April one of 2020. So is there anything that's being done to essentially make the landlord's hole in these cases or are a lot of landlords just taking the hit? And if that's the case, what if they can't um sustain a property or a mortgage or what happens in that? So the answer is, the housing is key subsidy was to help landlords get through the pandemic as well and and and the effects of a covid moratorium on eviction. The truth of the matter is, there are lots of landlords that are being devastated by in essence, the failure of a tenant to pay rent. I've got, I can give you story upon story of a tenant or I'm sorry, a landlord who is not necessarily a a big business, a a landlord that has all kinds of property, you know, one comes to mind, I have a, a family that for, for lack of a better term, they worked their whole lives to buy a little six unit building in the mid wilshire area, not a great building, not, not huge influence.

And the idea was this was gonna be retirement. This was gonna be how they were gonna make ends meet after they retired. Life happens. Uh, the, the husband passes away. The wife moves into one of the units and the other five units, probably 2.5, 3 of them support the building and then the other 2.5 or two units support her. Well, Covid hits and three units immediately stopped paying rent. One unit decides is going to pay the 25% of what is required under the covid laws in the state law. And she stuck trying to make ends meet and having to borrow money to do things like pay taxes insurance. Upkeep also just live and if she were not in a position to borrow money, what would happen? She should lose her because nobody's giving her a break. No tax collection agency is saying, hey, don't worry about it. No, no mortgage company is saying, hey, we're all good Covid. So these are, these are people correct me if I'm wrong.

These are people that like, so that's gotta be awkward. Right? These people, the landlords are on site living in one of the units. I think you said managing the building and then their tenants and their on site. That's got to be some awkward interactions between these folks that are wanting to collect the rent, not paying the rent. And it sounds like you get adversarial there on that little six unit patch, it gets adversarial? I I've I've got several landlords that we've had to basically calm and get them to stand down because again, it's you get into a situation where you have tenants who end up feeling entitled. You. You will see every time that there is a a news story about eviction in los Angeles, you'll have a tenant right organization jump up and down or people who are speaking on behalf of it saying this is a fundamental right, housing is a fundamental right and I don't know any landlord that feels that know that people should be out on the street, we should be put people out on the street. However, the american dream was come to this country, work really hard, succeed and and live a fruitful life.

And so where are the pundits that are jumping up and down saying, hey, this poor woman can't afford to keep her building. And then when you get in the adversarial question, paul, you get a situation where if a landlord is not careful, you're going to subject yourself to a harassment lawsuit. So which again, you have what I'll call the militant defense firms, they're just waiting in the wings, can't can't wait to start jumping on landlords who they deem are harassing tenants. So it's it's it's ugly. The whole the whole situation is ugly. So with this moratorium? When with this ending, will the tenants owe back rent? Or is everything supposed to be forgiven or how does that work? It's a great question, nothing is forgiven. That's how the government with all of these moratoriums has been able to constitutionally have these, these moratoriums and these orders put in place. And what they've done is they said this is all quote deferred, Well, okay, so you've got deferred rent and what's going to happen about my guess?

And I think I'm gonna be pretty much right on, is that everything prior to february one of 2023 is going to be deemed consumer debt, just like a credit card. It's not going to be rent anymore, which means a landlord cannot evict if you don't pay. So what you're gonna have is you're gonna have these giant chunks of money that are going to be doing going And again, the orders are going to have some bright line as to when a landlord can seek to collect on these, a portion of it will be do and maybe the 2023, the end of 2023, maybe some of it will be done in 2024. So it's never been forgiven because that would be a taking under under the law. But what's gonna happen is you're gonna have the tenant continuing to live having this giant obligation over their head and when the time comes to pay it, you're gonna have landlords suing their tenants. And so now you talk about an adversarial relationship. You know, you're gonna have landlords suing tenants who are still in possession, not paying what they owe in the back.

And that's good if you're a landlord because at least you know where they're at to sue that opposed to they disappear and now go chase three years of rent. It's it's such an interesting market right now. I hear you talk I think about when you buy a car or something like that and you don't make your payments, they just come take the car, they repossess the car, You can't repossess somebody's house, right? You know, they they live there, you don't want to kick them out on the street. So it's fascinating, right? So let me let me get into this a little bit With our audience of real estate agents, they probably transact more single family homes and condos than they do multi family. So unlike a lot of what you do that might be multi family or rent control your average single family houses a little bit different. But I remember, you know, in the old days and probably to a certain degree coming up soon there are a certain percentage of homes that transact that are 10 and occupied and right because absentee landlord or an investor or somebody else that has a tenant and most people don't want to buy a tenant occupied house.

So the first thing the agent has to do with the homeowner has to do is remove that tenant from the house before they want to sell it. So that hasn't been possible in the last three years. There was really no way to remove a tenant to try to sell your home. Do you think that coming next year? In the next couple of years, agents can expect a lot of that homes that come on that need that need to have their tenants removed before they could sell them. Is that going to be a part of what agency? The next couple of years? I I think absolutely, let me give a little caveat to what you said, because there was a little wrinkle in the covid moratoriums, you could actually sell your property and the buyer for a buyer owner user could actually terminate a tendency. That was the one exception. So now you're, you know, think about this, you're you're a broker, you're listing the property, you're trying to get the highest and best value for the property and you're basically inviting your buyer to, in essence by a lawsuit. So what Yeah, well, I mean, it's gonna happen.

But what's the buyer going to do? I will tell you that the people I represent the buyer's gonna run in and say that's terrific. I need a deep discount to buy your headache. And so all of a sudden you've got that situation. So, again, answering your question, I think it's I think there's going to be an onslaught of, of folks who are going to be terminated, who are living in single family homes and what does that process look like? That's a fantastic question. It's it's very interesting because the old process of an eviction used to be a 3 to 60 day process. Even with a little bit of game playing. Now, what you have is you're going to have just absolutely the courts inundated. First of all, they're already underwater. I will tell you I filed a case at the end of september in santa Monica for a Beverly hills property. It was approximately 2 to 3 weeks before we got the filing. Just a stamped copy back and why? Well I I spoke to three different supervisors and here's what I got a call.

One, we're short staffed call to, we're inundated. We had 500 filings in the first week of october call three is I'm pleading please. I got a client that doesn't believe me when I'm telling him That you're you're inundated and you had 500 filings and ultimately we got it and in the case moves. I don't know what's gonna happen come February. Is it going to be an absolute onslaught where there's gonna be thousands of filings. I can tell you most of my landlord clients are not happy they feel like they've been abused for three years. So when the time comes, they're probably gonna say go what will happen to the court. Well if they don't add bodies to process and administrate, if they don't add courts, you're gonna be looking at a long time. You know, a long time in the, in landlord tenant world could be three or four or five months and we're not talking about the huge game plan of of asking for a jury trial and other games like seeking to have cases removed to federal court.

All of that of course delays significantly. It's just the processing times are gonna it's gonna be, it's gonna be brutal. Do you represent predominantly landlords or do you also represent represent primarily landlords? There are times when we feel that a tenant, especially on the commercial side, we will represent commercial tenants a lot. But on the residential side there are a few occasions where we feel the the attendant has been, somebody's been referred the referring sources, somebody important to us. So we we we take on the case and again, it's generally situation where we feel the tenant has been in a not treated properly. So you've been doing this for a while, eviction is a funny thing. Do you have any stories of some of the crazier reason someone gets evicted or crazy things. They do give us your your crazy story. If you, if you got one, Oh gosh, it's crazy story. Well, I will tell you that we we we just had one, I can tell you this is this is this is a true story covid related, I happen to represent a landlord who actually had a tenant that was found to be non Covid affected by the Beverly Hills rental commission.

We went to trial on the thing after a ton of of wasted time. And at the end of the day, the court found that, well, the tenant was supposed to give a declaration. They did. They were supposed to write a check for 25%. They did, but wanted to have nothing that had nothing to do with or say about the fact that they were adjudicated. Non Covid affected. This was a gentleman who was a retired person. So there was no job. There was no day care. There was no taking care of elderly. Any of the enumerated things that are listed on the Covid declaration that the state provided. So it's, I don't know if it's so interest. It's just, it's just, you know, it's certainly a sign of the times. What does that mean? You never had Covid essentially never was affected by Covid just play the game. The issue. The issue is, are you Covid affected in other words, I lost my job. So therefore I can't pay rent. I'm now taking care of elderly parents. Therefore I can't pay rent or I can't pay the amount of rent. I'm now taking care of Children. I'm having to deal with day care.

Those are the kinds of things that that Covid really would affect somebody. This gentleman. He wasn't covid effective. He was just a retired guy that didn't want to pay his rent because the government said he was okay. I know this is like kind of more out there. But if you tell somebody, hey, here's an option not to pay your rent, whether you have covid or not, like, isn't it just human for some percentage of the population to say, well, this is a great reason to save a little bit of money here. I, you know, I'm gonna get away with something here. Like I would expect a quarter of the population to be like great rents free now, just like if milk was free, I would expect everyone to grab milk off the shelf. The problem is that at some point the obligation is going to be due and payable and the reality is a a tenant, If a tenant was so well situated that they had thousands and thousands of dollars in the bank, then they probably wouldn't be renting. Generally a tenant is living paycheck to paycheck.

It's not, you know, this, this fantastic influence for the most part, well, if I'm not paying my rent and I'm using it for other things. If I am getting subsidies and I'm not using, I'm taking that extra surplus of money and I'm using it for other things. And when the time comes and it's time to pay the rent or the back do that's called out consumer debt and I can't pay it what happens and we're going to have a ton of people who are not going to be able to do that because they're not saving the money, they're not putting it aside. And now, what do we have? We're going to have the contentious landlord tenant relationship, we're going to have the situation where a tenant is being evicted, there's going to be a sit situation where people gonna be filing bankruptcies and you're gonna, you talk about a glut on the, on the, on the law and on the courts, that's what's going to happen. And who are they better off? No, they're going to ultimately be worse off. So for agents thinking ahead about the implication of this thing and I think, I know your answer, but we're gonna have some evictions, we're going to have some people move out of both multi family and I think single family homes.

So I think there's gonna be some opportunities for agents because there's gonna be some leasing work to do, right? There's gonna be some empty homes that need need tenants. Don't you think? I think absolutely, I think you're gonna have a lot of opportunity, I think there's gonna be opportunity to buy property as well. I think you're gonna, and again, is that more a reflection on the economy on interest rates or on the landlord tenant and the occupancy, I think all of it plays, But I think there's gonna be a ton of opportunity. I think certainly the leasing world, you're gonna have people rolling out and then rolling new tenants in, you're going to have people who are going to say I want out. Um you know, I just, I'm done. The absentee landlords gonna say I want to sell. So I haven't been paid rent in three years. I'm sick of operating properties. Get me a real estate agent. Yeah. And I will tell you, I I very close to me, my my my brother had a property and he he said, I'm done, I have, I have tenants that it's a multi family out, give me a triple net.

I am, I'm out of this. So maybe maybe I'm just thinking off the top of my head, I don't know what you think about this sarah, but like maybe if you're an agent right now, one thing you should be thinking of is approaching, call it absentee or investor out of state owners figuring they are sick of L. A. Moratorium bullshit, don't you think? And and maybe they want to sell. Yeah, I think that would be a very astute look, the real estate, the real estate brokerage and the entrepreneurs are always looking for the next thing. You know what, what's gonna be the next niche? I can get myself into the ones who survive during good times, bad times and, and and all times are the ones that can find a niche. And yes, there right now we're about to enter a niche. That's great. Yeah, that's really interesting advice. What uh talking a little bit about you, is there anything you could say that you've been doing evictions for quite some time? Is there anything you really like or love about your jobs or anything you hate about your job?

Also about your feelings about being well, you know, my my practice is very, my practices is very unique. As I mentioned, I do a lot of transactional stuff when the, when the world is going good, when things are fantastic. We are doing lots of deals. When the world turns as the world turns, we start fighting about the transactions. We just did just human nature. It's you know, sometimes people don't realize they have mirrors in their home and if they do, they cover them because then they would have to point fingers at themselves. So of course they will blame the seller. They'll blame the brokers, they'll blame everybody but themselves. And so we end up having a situation where we're now fighting about transactions. The landlord tenant world. For the first, I'm gonna say 20 plus years of my practice was a landlord world. It was absolutely a landlord world. You would, you would have to be awful at practice of law to mess up today. The last 15 years. It has been, it is completely flipped in Los Angeles. It is a tenant world and the you've got to be, you've got to have thick skin.

You've got a, there's nothing to enjoy about the process. The process, litigation is not for not for fun. I mean there are some that can litigate for sport, but for the most part, most people cannot litigate for sport and it's, it's an ugly unfortunate process, cost money, cost time, it is aggravating. And then at the end of the day, I can't tell you how many clients have said to me, You mean they get to stay, they get to, you know, they they get free rent. I mean, I don't get anything for free. So it's, it's still learning curve, but still that's why they call it a practice. It's the practice of law and not one day I won't have to practice anymore. I'll be good at it. Practice makes perfect. So why is Ella's tenant landlord situation? Why is it so much different than other places or is it it feels like it's very stringent here. Is there a reason for that? Why is there so much protection for tenants? I think the end of the day, ultimately it's a political issue. We are a state, um, that, and you know, it's not a bad thing necessarily, but we're we are a state that likes to take care of those who sometimes can't take care of themselves.

And I think that again, most of my clients, most of my landlords would not be opposed to that. That philosophy is just when it gets to a point where now it becomes an entitlement. Now it becomes a situation where people feel that I don't have to pay my I have it, I I don't have to pay it. Uh, that's the problem. That's that's the dilemma right there. It is not the I really lost my job. I was, I was a waiter. I, my restaurant closed, I have no job, nobody is saying let's let's throw him in the street. The problem is the guy like I mentioned in that other story who is retired sitting on a bunch of retirement money can pay every dollar he owes on time when it's due. And he says, hey, I don't have to. So I think ultima to answer your question sir, you go back to politically and then you've got a lot of that going on as well where you've got people who are bleeding hearts trying to protect those who sometimes can't protect themselves. Judges are generally 10ant friendly or or it depends it depends on, it depends on where you are, what jurisdiction you're in.

You have some that are clearly clearly lean towards the tenant, You have some that clear, really lean towards the landlord, not so much because you have hubs in the county of Los Angeles. So as an example, you will have in these hubs, you know who your judges are, you know who the judge who handles santa Monica is, you know who the judge who's handling Van Nuys is and those areas that are around that, you know who's in Pasadena. So you you have a good idea but again there's Daleen most are most evictions for nonpayment. Is that a majority of them or are there other reasons people evict tenants that are common for the most part? I would I would venture to say that 90 plus percent step back prior to covid 90 plus percent would would be non payment of rent situations maybe maybe even higher during covid forget the nonpayment part. So you know that flips and goes the other way because you couldn't evict for nonpayment. So you have nuisance cases, you have unauthorized occupants, you have unauthorized pets things of that nature.

Somebody breaking the law. So once the covid moratoriums go away it's gonna slide back to the 90 plus percent for non payment. Do you ever help with negotiating between a landlord and tenants like all the time? In fact it's uh yes this morning I actually contacted a tenant that I'm supposed to go to trial on tomorrow in Orange County and I called him up to say look here's what's gonna happen. You know I I know what's gonna happen, we're gonna go down there, we're gonna spend 34 or five hours down in court and if you don't work something out with me, this is what's gonna happen and if you do work something out with me, you're gonna get a better shot and we ended up negotiating something this morning that is going to work for everybody. So yes, it's it's always in fact, the courts will tell you when you check in every morning, go out in the hallway, talk to the other side, see if you can settle the case. I mean on the tenant side, I gotta think that no one really wants that eviction on their record on their credit because it's just gonna be that much harder to find a place.

Is that people see that as a threat having an eviction on their credit. Absolutely, Absolutely. In fact, in fact, you will see the judges in the hubs. So these are the judges that are handling these on on a daily basis. They will give a little speech upfront and they will tell the tenants and the landlords, hey go out negotiated. By the way, I'm sure you're gonna want to negotiate for a ceiling of the record, a protection of the record keeping it confidential. Absolutely. The difficulty right now is is that about two or three years ago? Probably about three or four years ago, the court and the the statutes came down and basically said there's an automatic ceiling of the record in an eviction case and told judgment. So there used to be a 60 day hold, you know, you get in, get out, get your case heard, work it out said let's dismiss it And you still be protected if you're in the 60 days now it's open ended until final judgment. So a tenant can basically run this thing through the gamut and spend bring all kinds of motions and bankruptcies and things and still be protected.

But to answer your question, Paul Yes, it's a huge issue because there are reporting agencies. There are companies that basically this, this is what they do. They are, they are checking the names of people so that landlords can check in with them to find out whether a tenant has had an eviction history. Right? So last question based on what we're seeing and what you project is going to happen next year too. It sounds like you're gonna be a busy guy, right? Like there's gonna be a lot of work for you. Right? I I suspect. Yeah, awesome, awesome. Well this is this is great. I appreciate you passing along all the information. And it was uh, it was helpful to hear what's what's happening and how things are changing and it is what it is. This is where we live. We live in L. A. And uh we have to live under the guidelines. Right? Absolutely. Well thank you. Richard appreciate it. Really. It was fun. Thanks yeah, thanks for coming up. Thanks for joining us for today's episode. I'm paul with great builds and I'm Sarah with Glen oaks escrow and if you like what you heard, make sure to subscribe rate and review if you'd like to get in touch, please email us at L.

A. Realtor pod at gmail dot com. We'll see you next time. We'll see you next time.

Moratorium Mayhem – LA’s Eviction Scene, with Attorney Richard Marker
Moratorium Mayhem – LA’s Eviction Scene, with Attorney Richard Marker
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