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ALERT: Philadelphia's "Good Cause" Eviction Bill

On December 6, 2018, the Philadelphia City Council passed Bill Number 170854-A, known as the "Good Cause" Eviction Bill.  This bill amends the "Unfair Rental Practices" statutes of the Philadelphia Code found in Section 9-804.  The bill prohibits residential landlords from vacating, renewing or terminating certain leases at their expiration date without providing tenants a "good cause" for ending the lease regardless of the terms of the lease. However, it is important to note that the final bill passed by City Council is only applicable to leases with a term of less than one year.  While the passage of this bill is considered a victory by many tenant rights groups, the restricted application to short term leases was a significant concession to property owners.

The bill includes a list of examples of what such "good causes" could be to justify the termination or non-renewal of a lease.  This list includes causes such as habitual non-payment or late payment of rent, breach of the lease, activity causing nuisance by the tenant, or deterioration of the property by the tenant. The Bill also requires landlords to notify the tenant of non-renewal or a substantial change to the lease in writing by issuing a notice to vacate or notice to terminate. This notice must be given 30 to 60 days (depending on the length of the lease) before the eviction or the substantial changes are to take place.

The bill also provides tenants the right to challenge the provided good cause in court or by filing a complaint with the Fair Housing Commission. Critically, while the challenge by tenant is pending before the Commission, the notice to vacate or the notice to terminate the lease will not be effective unless a court finds that the challenge was filed in bad faith. The practical effect of this provision is that a landlord will be unable to remove a tenant at the end of the lease term if the tenant files a claim under these provisions. 

The overall intention behind the bill is to provide tenants with more rights at the end of a lease term or in the face of an eviction by giving them more notice and options before being forced to leave. Proponents of the bill argue that the playing field between landlord and tenants should be more even and that the bill's impact would not negatively affect the real estate market as the New Jersey market seems to be bearing well with a similar good cause legislation in place.  

The bill was opposed for the fear that its rental protections will discourage property owners from entering the rental markets in the low-income neighborhoods and consequently reduce the supply of affordable housing in these areas, particularly for the short-term leases affected by the bill, and otherwise disrupt the business of residential landlords. Landlords and realtors have deemed the bill an attack on property and constitutional rights of landlords to freely contract with tenants.

The bill also does not go so far as to include rent control but provides that in the instance that the landlord seeks to increase rent, landlord must provide the tenant an option to accept the proposed rent increase. The tenant must accept the option within 30 days of its notice, and an acceptance by the tenant that occurs within 15 days of the expiration of the current lease will not be valid. Many other cities and states have also enacted good cause/just cause housing ordinances, including San Francisco, Los Angeles, Seattle, Boston, and the State of New Jersey.  Unlike the Philadelphia bill, some of the other good cause eviction ordinances require the landlord to pay the tenant relocation fees varying from $2,900 to $4,500 in the instance that they are evicted without a good cause.  

City Council also suggested that it is open to amending the bill if additional implementation measures are necessary. Observers can also expect to see additional efforts from City Council to pass more legislation aiming to address housing issues and other social and economic causes in the coming year.

For more information please contact, Ken Fleisher kjfleisher@zarwin.com at and Scott Goldstein at segoldstein@zarwin.com


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