Doug Michie, a Ventura based lawyer, filed a complaint on May 8th. 2020 with the 3rd district court of California against the Governor’s executive order banning the evictions of tenants who are living in rental properties across the state.
In his complaint, Michie used specific text from the United States Constitution as the basis for his complaint:
“No State shall … pass any … law impairing the Obligation of Contracts” (Article 1, Section10, US Constitution) …” Nor shall private property be taken for public use, without just compensation” and…Violations of Substantive Due Process (5th Amendment US Constitution).
Although he’s a Ventura based lawyer, Michie initially filed the lawsuit on behalf of his wife, a real estate investor, who owns rental properties in Cambria and other locations across California. Her rental properties, like many owners across California, have suffered from the loss of rent and value following the Governor’s ban on evictions, which was initially only supposed to be until the end of May 29 but has been extended to July 28th.
Doug Michie’s Complaint Stops The Governors Eviction Moratorium On July 29th
There’s no doubt that the California rental market faces an unprecedented crisis due to Coronavirus, but continuing to extend the eviction moratorium past July 29th is not the answer to the problem since such an extension would further hurt landlords economically across the state.
Thankfully, Michie’s complaint effectively ends Governor Newsom’s eviction moratorium (at least for now) on July 29th, 2020, because it also sunsets an additional 90-day period, which if approved would have given tenants a further three months to live rent-free.
The complaint filed by Doug Michie effectively holds evictions in California in abeyance as of August 3rd, 2020, giving hope to landlords who have been stuck in a state of paralysis with tenants that have been living rent-free in their properties, some even as early as November 2019.
I’m down in San Diego. Have a Tenant who last paid in November. Took to court using attorney and prevailed in Feb. Sherriff’s lockout scheduled for Tues Mar 17th. That weekend the Governor’s order came down. I’m About to enter the 8th month I’ve had to harbor these deadbeats. I have the perfect case for a class action because I was two days away from a lockout. Covid19 had nothing to do with my situation. How do we get one going? I’m no lawyer, but it sends that the government is declared a temporary eminent domain of my property and, as such, should justly compensate for that. – Royce Kemp (biggerpockets)
Complaint Highlights The Economic Uncertainty That Many Owners Face
During the Coronavirus pandemic, most media outlets have tended to highlight the plight of tenants across California while at times ignoring what owners have been facing economically.
The reality for landlords in California is that many owners don’t have retirement or 401K plans in place because they rely on their rental properties in California to fund their retirements.
Sadly, current estimates show that loss of rent in California during the pandemic is about $1 billion dollars when we factor in an average rent of $1,429 and the estimate that roughly 25 percent of tenants haven’t paid their rents in almost five months.
If the Governor and state lawmakers don’t try further legal maneuverings to extend the eviction moratorium, the next step for property owners could also be to file a class-action lawsuit against the state for recovery of compensable losses in the California court system.
Contact 36 North Property Management
To learn more about what’s happening in the California rental market, or to speak with us about the property management services we can offer you, contact us today by calling (831) 484-4604 or click here.