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Oakland Gets Sued For Law Requiring That Landlords Pay Tenants Up to $12,000 Just to End a Lease

Lyndsey and Sharon Ballinger's lawsuit claims that Oakland's Uniform Relocation Ordinance is unconstitutional.

Pacific Legal FoundationPacific Legal Foundation

Should you have to pay thousands of dollars before you're allowed to move back into your own home?

That's the question raised by a new lawsuit filed against the City of Oakland, California, where a local regulation requires landlords to pay as much $12,000 to tenants if they wish to reoccupy their property. The plaintiffs are Lyndsey and Sharon Ballinger, an active duty military couple who rented out their three-bedroom Oakland home in September 2016 after Sharon was stationed in the D.C. area.

In January of this year, while the Ballingers were out east, the Oakland City Council passed its Uniform Relocation Ordinance, part of which requires that landlords looking to end a rental agreement for the purposes of reoccupying their home pay their tenants a set relocation fee.

The fee is largely determined by the size of the rental property. Renters vacating a studio or single-bedroom unit are entitled to a $6,875 relocation fee. The cost is $8,462 for a two-bed unit, $10,445 for a three-bed or larger unit. Tenants who are low-income, are elderly, or have children are entitled to an additional $2,500.

Renters are entitled to two thirds of the above fees after living in a unit for a year, and they're entitled to the whole amount if they've rented a property for more than two years.

Despite renting out their home well over a year before the city passed its ordinance, the Ballingers were forced to pay their tenants $6,582 before they were allowed to end the lease—which at the time was being renewed on a month-to-month basis.

The intention of the Oakland rental ordinance—giving renters a break in the midst of a severe housing shortage—is noble, says Meriem Hubbard of the Pacific Legal Foundation, a public interest law firm representing the Ballingers. The problem, she says, is that it unfairly shifts the burden for addressing this shortage onto property owners who played no role in creating it.

"Instead of the city figuring out how to get more housing or to get less expensive housing or to develop more properties," says Hubbard, "what they're doing is they're making the landlord pay the tenant to leave."

Being forced to pay $6,582 to their tenants is a hardship for the Ballingers, a young military couple with two small children. It's more than the military paid the family to move across the country—and according to Hubbard, it's unconstitutional. It violates the Fifth and Fourteenth Amendments by taking property, in this case the $6,582, without compensation and without a public purpose. The complaint also claims that the law imposes unconstitutional conditions on the Ballingers' use of their property by requiring they pay the relocation fees before retaking possession of their home, something they are otherwise entitled to do.

Oakland's relocation regulation is similar to rules on the books in San Francisco, Los Angeles, and Berkeley, all of which could be endangered should the Ballingers win their case.

The lawsuit was filed last week, and it will be a while before any decision on its merits is handed down.

Photo Credit: Pacific Legal Foundation

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  • Pro Libertate||

    It's unconstitutional and dumb. Let's chase off the landlords, shall we?

  • Sometimes a Great Notion||

    Well it worked in the Ukraine under the Soviets and in China under Mao, so what could go wrong.

  • David Welker||

    The landlords are the ones lobbying government to prevent new development because it turns out that landlords don't like competition from other landlords.

    So, maybe they should be chased off. Why not?

  • The Heresiarch||

    The best way to deal with a housing shortage is to provide a major financial disincentive to rent out your property. Genius.

  • Paloma||

    Or to build more housing.

  • buybuydandavis||

    America needz moar profits for housing rental corps.

  • David Welker||

    Have you seen rents in the Bay Area? The problem is not that there is not enough financial incentive to rent your house out. The problem is that there is not enough development allowed because of all these NIMBY homeowners who like to keep their property values up and the rents high. It makes sense. If you are a landlord, why would you want competition from other landlords?

    Your apparent solution is apparently to make sure that the NIMBY's maximize their profits. Otherwise, they will be "disincentivized." But actually, if we could find a way to "disincentivize" NIMBYism, we would take the wind out of their profit-maximizing sails (which is based on using government regulation to extract higher rents out of society) and solve the housing shortage. These people literally lobby the government to prevent other people from developing their own land for high density housing. And you are mainly worried about disincentivizing them??? Go figure.

  • DiegoF||

    If you accept the premises of rent control, it might make some sense to protect tenants from owner occupation to some degree, in addition to kicking someone out to rent to another. I bet owner occupation was "abused" in some circumstances to get long-term tenants out. Of course reasoning from the premise that rent control is either legitimate or desirable is not worth much mental energy so who cares? In any case the Democrats now control NY so we are assured stronger rent control is finally coming to save us all! And who else knows how more similar we shall get to California? We have been promised that the disgrace of not being at the forefront of progressivism is at long last over, and things will be changing very very drastically. The pussy-hatted shrews of Long Island have apparently decided that unenforceable gun and abortion-rights laws and really sticking it to Trump were important enough to do this, so I guess that is that.

  • Agammamon||

    There already is that protection - the lease. But rent-control is an abuse of owners to start with.

  • Pro Libertate||

    Is rent control itself even legal?

  • DiegoF||

    There wouldn't be a name for it if it weren't in place! Many state constitutions permit it, yes.

  • Pro Libertate||

    I know the practice exists. I was wondering whether there's a federal angle.

  • DiegoF||

    Extremely doubtful.

  • retiredfire||

    Government making unreasonable restrictions on private property could cross into the territory of a "taking", evoking the Fifth Amendment and requiring "just compensation".
    It happened to the California Coastal Commission, which put severe restrictions on housing within their jurisdiction. The courts said it would be considered a "taking" and the commission would have to buy all the houses it so restricted.
    The restrictions were eased.
    When it becomes "unreasonable" is a matter of judgement.
    Governments should be careful, lest they end up with no control.

  • DiegoF||

    As the example illustrates, rent control doesn't affect the landlord's inability to terminate someone's lease just because he feels like it. That is natural to contract law. It deals with other circumstances.

  • mpercy||

    "rent control appears to be the most efficient technique presently known to destroy a city—except for bombing"

    www.econlib.org/library/Enc/RentControl.html

    Economists are virtually unanimous in concluding that rent controls are destructive. In a 1990 poll of 464 economists published in the May 1992 issue of the American Economic Review, 93 percent of U.S. respondents agreed, either completely or with provisos, that "a ceiling on rents reduces the quantity and quality of housing available."1 Similarly, another study reported that more than 95 percent of the Canadian economists polled agreed with the statement.2 The agreement cuts across the usual political spectrum, ranging all the way from Nobel Prize winners milton friedman and friedrich hayek on the "right" to their fellow Nobel laureate gunnar myrdal, an important architect of the Swedish Labor Party's welfare state, on the "left." Myrdal stated, "Rent control has in certain Western countries constituted, maybe, the worst example of poor planning by governments lacking courage and vision."3 His fellow Swedish economist (and socialist) Assar Lindbeck asserted, "In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing."

  • retiredfire||

    Good thing for rent control advocates, hardly any municipal legislators are economists.
    Stupid is as stupid does.

  • David Welker||

    Rent control only matters if it is the limiting factor preventing housing from being developed.

    Let's say there was a government regulation forbidding ALL new housing, no matter what.

    Then rent control is imposed. What happens? Does the rent control prevent new housing from being developed? No. The separate government regulation already was doing that. Rent control would still have an effect in terms of the division of the "pie" between landlords and tenants, with tenants getting more and actually taking a sort of "ownership" interest in someway. And it would disincentive the improvement and maintenance of existing properties to some degree, because neither landlord nor tenant can benefit as much financially from long-term improvements. But, overall, it would not much matter. Not as long as new housing development was restricted by this other law.

    Well, back in the real world, this other law does exist. It is called restrictive zoning. And while zoning does not prevent all new housing, it prevents enough such that we have a housing shortage in the Bay Area and in California more generally.

    Rent control is a side show. It could do more harm, sure. But only if the restrictive zoning that is the real constraining force were severely curtailed first.

  • David Welker||

    Rent control is definitely the wrong solution.

    The right solution is to allow more development. But the NIMBY's who benefit from less competition from other landlords are good at using local government to prevent that.

    So, if rent control "punishes" these NIMBY's a little, or causes there anti-development efforts to be a little less profitable, I don't have a huge problem with that. I would only say that rent control should only be imposed upon existing housing, and not new development.

    Better yet, just allow a lot of new development and there will be no demand for rent control because it won't be a problem. But, that is much easier to talk about than accomplish.

  • ||

    Wow.

    Good luck to them

    Give 'em hell.

  • creech||

    No, the idea isn't "noble" unless used in the original fashion to mean that someone granted powers by the king could do whatever the hell he wanted with and to his peasants.

  • FreeRadical||

    Right. Noble my ass. Petty tyrants, to the extent they even have a conscience, often salve it with soft pretty lies that they are noble.

  • My Dog Bites Better Than Yours||

    The intention of the Oakland rental ordinance—giving renters a break in the midst of a severe housing shortage—is noble, says Meriem Hubbard of the Pacific Legal Foundation, a public interest law firm representing the Ballingers.

    "Noble", my ass. You are virtue-signalling with other people's money. It's the easiest thing to do.

    Also, I think they forgot to close the circle of absurdity. Is there a provision that prohibits taking the move-out fee into account when the owner sets the monthly rent?

  • tommhan||

    Yep, easy to be "nobel" with someone else's money.

  • BYODB||

    So this lease was month-to-month, but the homeowner couldn't actually cancel the lease? Yeah, that's a massive problem if someone is a landowner looking to rent. And Commiefornia can't figure out why no one wants to build or lease housing. LOL

  • DiegoF||

    Rent control comes in various forms. But usually the amount a landlord is allowed to raise rent for a current tenant differs from the amount he is allowed to raise it on the open market. Very often the latter is unlimited, for example. Anyway when there is a difference like that, naturally the law also places severe restrictions on the landlord's ability to refuse to renew to the current tenant, because otherwise the law would directly be encouraging tenants to be moved out left and right! So that is how it works.

  • BYODB||

    Perhaps, but a month-to-month lease generally comes with the understanding that it can also be terminated at any time with perhaps a 90 day notice requirement from both sides of the agreement.

    The idea that I would need to pay someone a huge fee to get out of a month-to-month lease as the owner is insane, full stop, since the property belongs to me not the renter. The lease is there to spell out the terms of the lease, and this is apparently a massive fine on top of whatever the lease terms were.

    I don't know about unconstitutional, but this would certainly seem to be an ex post facto law since it changed the terms of leases that were already in effect.

  • DiegoF||

    Why would a month-to-month come with that understanding in a municipality whose statutes specify otherwise? All contracts are signed with the understanding--usually specifically provided for in the language--that they are to be subject to the provisions of local law. That is the background context of any contract.

    Like I've been saying, it makes perfect sense in the context of rent control. This is only one of the reasons why rent control is insane. But you can't have rent control--at least the kind that lets you raise the price of a vacant apartment more than you could an occupied one--without it.

    I haven't examined the constitutional arguments being made against this particular law. Maybe they're good ones. It's perhaps odd that Oakland could have not permitted this "owner reoccupation" exception in the first place; whereas allowing it, but at a price is more questionable! But that's often how these things work.

  • BYODB||

    It would be because otherwise functionally you can not ever get rid of a tenant without paying a huge fee, and if you accept the notion of rent control you must also find the notion of private property and contract law repugnant.


    In this case it was a fee added onto a lease, by the government, that only harms the property owner and it was not included in the terms of the original lease. That should in fact be prohibited by the federal constitution.

  • Bubba Jones||

    Seems like the solution is to scrap month to month leases.

  • Juice||

    Or increase the rent every month until you cover the cost of the relocation fee. Oh wait, that's most likely not legal.

  • DiegoF||

    It most certainly is not! That is the whole reason for any of this, the context against which all of this is to be viewed. There is rent control in Oakland. The rent control ordinance places some sort of greater restriction on raising rent for an existing tenant than what one may ask of a new one. Hence the rule that you must normally re-rent to an existing tenant if he wishes. If it gets to a point where you're clearly hoping the tenant can be persuaded to leave, at that point you just don't sign a lease and (this part is very common, whether or not there is rent control) thus the law says the tenant is automatically on a month-to-month on the terms of the existing lease.

    Oakland like many places apparently had a "loophole" that allowed a landlord to kick a tenant out (of certain unit types; looks like single-family homes) for use as the landlord's own primary domicile (provided he'd lived there before, it would appear). But now they decided to cut back on that privilege a bit and impose a fee.

    You have to get this context or you are missing the point of the whole thing.

  • BYODB||

    What you get are landowners who let the property maintence lapse until the building gets condemned because it's cheaper for the landlord than paying an exit fee or taking a loss on the property.

  • Longtobefree||

    That poor serviceman will have retired before this gets settled.

  • Red Rocks White Privilege||

    The plaintiffs are Lyndsey and Sharon Ballinger, an active duty military couple who rented out their three-bedroom Oakland home in September 2016

    Buying a house in Oakland was the first mistake. Renting it out instead of selling it when they PCS'd was the second.

  • Juice||

    When I started learning of all the laws against landlords in MD, it blew my mind. A "tenant" can completely fuck up a landlord's life and property with absolutely no consequences to themselves. I know someone who owns a couple of rental properties thinking it would be some extra income. All it took was one "tenant" going FUBAR on the house they were in to ruin that prospect for life. The landlord will be lucky to ever recover financially from it. And there's nothing he can do about it. He could try to sue, but it's one of those blood from a stone things. He was really emotionally fucked up by it for a long time too.

    We moved out of a rental house only about 8 months ago and the landlord still hasn't been able to rent the place out because they have to be so picky. The slightest indication that you could possibly be a deadbeat and they drop you. I don't blame them one bit, but it's costing them thousands in lost rent. They can't sell the house because it would hit them for $90-100k in taxes they'd have to pay because they claimed depreciation on it for so long. They'd have to pay it all back if they sell. Ridiculous. I told them to "live" in the house for a year, so that the hit is only for the rent that year, which would be much less (~$20-25k).

  • BYODB||

    Good advice for a shitty situation.

  • Juice||

    It violates the Fifth and Fourteenth Amendments by taking property, in this case the $6,582, without compensation and without a public purpose. USE!!

    Use the language of the 5th amendment, not that of the Kelo decision.

  • Rich||

    The problem, she says, is that it unfairly shifts the burden for addressing this shortage onto property owners who played no role in creating it.

    What's magic about "housing shortages" in this regard?

    A lotta guys note that the burden for addressing government fuck-ups is *generally* shifted to taxpayers who played no role in creating them.

  • DiegoF||

    She's their lawyer making a public statement about the law her client is trying to contest and its potential claimed state interest. Probably prudent choice of argument in that context.

  • Eric||

    As I understand it, the reasoning behind this law was to prevent a common loophole landlords were using to break a lease in order to increase rent. I'm OK with recompense to the renter in that case. However, this article states that the lease was month to month. I don't get it, what's the point of a month to month lease then?

  • DiegoF||

    No. You should search for my comments elsewhere on this page. (As should everyone, in general, at all times. I am incredibly wise.)

  • DiegoF||

    (At least that is what I assume is going on. Poor linkage on this article.)

  • Eric||

    You're far too verbose and knowledge ridden for my tastes. I'd prefer the topic be filtered through a partisan lens so that I know which team to root against on this topic.

  • Sevo||

    "...I'm OK with recompense to the renter in that case...."

    Great!
    You pay it.

  • Eric||

    I'd rather the contract breaker pay it.

  • Malvolio||

    No one is breaking any contract. One party is terminating a contract, in accordance with its provisions.

  • Marcus Aurelius||

    You know who else relocated citizens without compensation?

  • DiegoF||

    FDR?

  • Sevo||

    And how!

  • Olga||

    Clearly this is poorly designed legislation. My friend rented out his house because he could not sell it. He was getting married and moving into his wife's home. So he rented out the house. Sadly, his marriage did not last. He ended up moving out and renting a room for about 4 months before he could move back into his house because he had to honor the lease agreement.

    So yes, landlords should honor their lease agreement and give tenants a reasonable time to find a new home. However, I think this relocation payment is a bit much. It discourages people from renting out their place entirely if they plan to ever re-occupy it in the future.

  • buybuydandavis||

    "It discourages people from renting out their place entirely if they plan to ever re-occupy it in the future."

    Ask who wins. Corporate landlords and landowners. The guys with political pull.

    Driving out actual homeowners from the rental market tightens supply.

    Profit for the ruling class in the name of helping the poor.

    Democrats.

  • rth||

    Landlord: That will be two months rent, security deposit and "administration" fee of $6,875. K thx bye.
    Tenant: -_-

  • Malvolio||

    I was just thinking that. "If the landlord terminates this lease, he is entitled to..."

  • Juice||

    And you'll be wondering why you can't rent your property out.

  • Eddy||

    'taking property, in this case the $6,582, without compensation and without a public purpose"

    No, it's taking their *house* for private use. If we accept the Kelo "public purpose" BS, then it's still uncompensated so still unconstitutional.

    The $6,582 is the penalty they impose on the exercise of a constitutional right, like a $6,582 tax on running an editorial criticizing Congress.

  • Barry Gold||

    I would like to see the Ballingers win their case, but I doubt that there are enough pro-property-rights people in the court system for this to happen. Even President Trump's appointments don't seem very interested in the "takings" clause.

    Still, it might happen. We can hope.

  • buybuydandavis||

    Classic Lefty law.

    "Look, sad face from someone who wants X and can't have it. How do I take a pound of flesh out of the providers of X so I can feel good about myself?"

    See minimum wage laws for details.

  • buybuydandavis||

    Wait. This is to end a lease?

    Why should they be allowed to do that at all?
    What do "contract" mean?

  • buybuydandavis||

    A rental agreement can be month to month, and I see no reason to pay someone to end it.

    But a lease is a contract to rent for a specified period.

    Why should one side be able to cancel the contract without consideration?

  • EirkKengaard||

    Have they set up a gofundme ?

  • Curly4||

    I would think that the law being passed after the lease was signed would prevent it from affecting those leases. Only leases that is signed after the proposed law had become law.
    In any case I wish them well and hope they stop the government from completely controlling their lives and intervening as it is.

  • David Macko||

    The Oakland ordinance is a blatant promotion of the basic essential of "modern" communism as described by its founder, Karl Marx, in his infamous book, The Communist Manifesto: the abolition of private property in land. Short of outright confiscation, imposing huge fees for the use of your own property certainly deprives you of your right to use it.

  • I am the 0.000000013%||

    It's like Lyndsey and Sharon never even watched Rambo.

  • David Welker||

    The idea that homeowners have no role in the severe housing shortage that causes these sorts of government policies is false. Homeowners benefit when housing prices go up. Neighborhood associations often oppose new development. Put two and two together, and I don't think homeowners come out looking like angels. It is not as though all of these housing restrictions exist when no ordinary people want them. There are interest groups, namely homeowners, who use the government to restrict the development of property they do not own, and who then benefit from increased home values and increased rents.

    I am sympathetic to the renters. Perhaps, because I am one. But, also, because they certainly do not benefit, but instead pay the cost and enjoy none of the benefits due to these anti-development attitudes. The real solution to the housing shortage problem is to allow more developers to construct more and higher density housing on their own property, rather than having some property owners use the government to strangle development that other property owners want to do. The market here is broken. In this context, "saving" homeowners from having to compensate renters is not a high priority, since when homeowners do not feel any of the cost they impose on others, the status quo is just likely to continue.

  • Enemy of the State||

    An economist will point out you, it will be the tennants who pay for this cost either through higher rents or reduced supply of rental units...

  • tommhan||

    Hard to believe anyone productive would want to live in California with all the nutty politics.

  • theshubhammeena||

    Loved it. Do not forget to read Sad Shayari and Hindi Love Shayari.

  • TGoodchild||

    "Should you have to pay thousands of dollars before you're allowed to move back into your own home?"

    Maybe, yes. Why could the homeowners not simply provide sufficient notice and then terminate the lease? If they wanted to just move back in without providing adequate notice, I don't see the big fuss. The ordinance basically creates liquidated damages for those certain breaches by the LL.

  • BadLib||

    [...] which at the time was being renewed on a month-to-month basis.

    There's no indication in the article that these ladies didn't give the usual notice required by California law (or the rental agreement if that was, oddly, more restrictive) to the tenants to terminate a month-to-month rental agreement.

    As the rest of the piece says, the Oakland law

    requires that landlords looking to end a rental agreement for the purposes of reoccupying their home pay their tenants a set relocation fee.

    The landlord must pay the relocation fee even if they choose to terminate a lease to reoccupy the residence and follow all the notice requirements of the law and the lease.

  • Soronel Haetir||

    How is a month-to-month rental a lease? A lease is a subset of rentals, the two are not co-extensive. I could well see the Oakland law making sense if it were in fact limited to leases but applying it to bare rentals is a very different matter.

  • Gasman||

    Message to those with potential rental property: let it sit vacant is cost effective if you are going to be away for only a couple years.

    There, that should ease the shortages in the rental market.

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