Lawsuit Could Impact California Renter Protections

milind-kaduskar-87650-copy-300x300Before February 2016, Danielle Phillips and Paul Kelly rented a two-bedroom house near the beach, paying $1,900 in monthly rent. Then, that February, Phillips and Kelly came home to a notice from their new landlord, Matthew Dirkes, who was raising the monthly rent to $6,700. This was not only more than three-times the previous rent, it was also far above median rents for single-family homes in the area, San Francisco Magazine found and reported.

Phillips and Kelly knew what was happening. They were being evicted under the premise of a lawful rent hike, so they sued. The trial court sided with the landlord but now the couple are appealing to California’s First District Court of Appeals. The appellate court’s decision could have a significant impact of tenants’ rights and protections within the region.

Phillips and Kelly Had Few Legal Options

Because that rental home was not protected by San Francisco rent control, Phillips and Kelly could not argue against the amount of the increase. Without rent control, landlords can raise rent as much as they need to so long as they give tenants proper notice under the law.

Dirkes also did not technically evict them, either. He simply raised the rent to an amount very few people could afford and most would choose not to pay. This forced Phillips and Kelly out of their home, enabling Dirkes to move into his house. While what happened in reality resembles an owner or relative move-in eviction under San Francisco law, an eviction is not what took place on paper. Since Dirkes did not technically evict his tenants, they were not entitled to relocation assistance, which would have amounted to approximately $20,000.

A Question for the Courts

There is a lingering question that has yet to be answered by a local ordinance, state statute, or lawsuit and that is whether there is a limit on rent increases for single-family homes and condos. How much is too much? So far, it appears as if landlords are entitled to do what Dirkes did – raise the rent an astronomical amount in order to get tenants to leave.

Landlords believe any amount of rent increase is allowable, no matter the motives. However, tenants like Phillips and Kelly have continuously argued that extremely high rent increases are constructive evictions and are simply a way for landlords to get around the law and avoid going through proper eviction procedures and paying relocation expenses.

Landlords and Tenants Awaiting Outcome of Lawsuit

 

Many cases like Phillips and Kelly’s have been brought into court. However, most landlords settle with the previous tenants, which is one of the reasons there is a still a gray area in the law. Now, with this case moving forward, a judge will have to decide whether Dirkes’ actions were lawful or amounted to a wrongful conviction.

Landlords and tenants are eagerly awaiting the outcome of this case. If the judge sides with Dirkes, this is a clear victory for landlords of single-family homes and condos that are not covered by rent control. It will affirm that they have the right to raise rents as much as they want without any requirement of being in good faith or staying near market rates. However, if the judge sides with Phillips and Kelly, this is a victory for tenants and will bolster renter protections. It will enable tenants of single-family homes and condos to file suit for rent increases that amount to de facto evictions.

Do You Need a Tenants’ Rights Lawyer?

If you are facing a similar situation to Phillips and Kelly, contact our experienced San Francisco tenants’ rights attorneys of Brod Law Firm at (800) 427-7020 right away.

(image courtesy of Milind Kaduskar)