The Ninth Circuit Court Of Appeals Affirms The Constitutionality Of Local Ordinance Requiring Landlords To Pay A Tenant Relocation Fee

• Published date: 16 February 2022
• Subject Matter: Real Estate and Construction, Real Estate, Landlord & Tenant - Leases
• Law Firm: Snell & Wilmer
• Author: Mr Cameron J. Schlagel and Eric S. Pezold, P.C.

On February 1, 2022, the Ninth Circuit released its opinion in Ballinger v. City of Oakland¹ affirming the district court's dismissal of a lawsuit in which the plaintiffs claimed that the City of Oakland's Uniform Residential Tenant Relocation Ordinance (the Ordinance) was unconstitutional under the Fourth, Fifth and Fourteenth Amendments to the United States Constitution.

That decision has broad implications. California's state tenant protection laws require "just cause" for eviction subject to limited exceptions, and many local governments, like Oakland, have enacted laws that impose even stricter requirements. Over the last two years, the State and many local governments have cited the COVID-19 pandemic as justification for further restricting the rights of property owners to evict residential tenants. The Ninth Circuit's decision in Ballinger signals that courts will view those restrictions as a constitutional exercise of the State's police power to regulate the landlord-tenant relationship, leaving property owners with limited and costly remedies to remove unwanted tenants.

Background. In 2016, the Ballingers leased their Oakland home for one year while they were out of the state for military duties. After the one-year term expired, the lease converted to a month-to-month tenancy. Under Oakland's Municipal Code, even after a lease term expires and converts to a month-to-month tenancy, the landlord may only end the tenancy for "good cause," which includes when a landlord-property owner chooses to move back into the home.

In early 2018, Oakland adopted the Ordinance, which requires landlords who re-take occupancy of their homes at the end of a lease to pay tenants a relocation payment calculated based on rental size; moving costs; the duration of the tenants' occupancy; and demographic factors such as whether the tenants have low income, are elderly or disabled, or have minor children. Tenants, however, are not obligated to spend that payment on relocation costs; they can use the money towards anything while there are strict penalties for landlords who, in bad faith, fail to make the relocation payment. In such circumstances, the Ordinance allows a tenant to sue the landlord for injunctive relief, the relocation payment, attorneys' fees, and treble damages.

When the Ballingers were reassigned to the Bay Area, they decided to move back into their Oakland home. The Ballingers gave their tenants 60 days notice to vacate and paid the relocation payment...