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Landlords are Using an Old Financing Trick to Get Around Eviction Freezes

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When coronavirus started sweeping the country this March, Francine Simpson lost three jobs. The 26-year-old was apprenticing in a Los Angeles-area tattoo shop, while babysitting and working as a waiter for a caterer on the side. Like nearly one in two American adults, she survived paycheck-to-paycheck before the pandemic. Without a job, Simpson couldn’t pay her $655 share of the $1965 rent that she splits with two roommates. She quickly started receiving threats from the property management company hired by her landlord.

The leasing office at Villas Antonio Apartments in Rancho Santa Margarita, Calif., which is owned by Western National Property Management, a development company that owns more than 160 properties, called her four times asking her to sign a 120-day rent payment deferment agreement. Simpson refused, explaining that she does not know when she will return to work and that she can’t be evicted under current California law. Simpson said the manager replied, “We can’t evict you — yet.”

Deferment agreements like the one presented to Simpson are commonly used by landlords and property managers when tenants are unable to pay rent. These agreements enter tenants into legally binding contracts to pay their rent owed within the number of days designated by their landlord. In Simpson’s case, if she were to sign her contract and find herself unable to pay when the California eviction moratorium expires on July 28th, her property owners could file an unlawful detainer case against her, which would forcibly remove her from the property and place an eviction on her record. The property owners would also have the option of suing Simpson for the amount of rent owed.

Representatives at Villas Antonio Apartments and at WNPM’s headquarters did not reply to requests for comment on the deferment agreements they are issuing to Simpson and other tenants.

Before COVID-19, these agreements were used by renters who had fallen on hard times, such as being in between jobs. With a deferment, renters could delay paying rent until they were back on their feet. But in the midst of a massive economic depression, with unemployment at over 13 percent and an estimated 21 million unemployed Americans in May, many people won’t have a steady income for months. This can leave those who sign such agreements vulnerable to eviction as the economy remains unstable for the foreseeable future.

“I’m usually ok with payment deferment agreements like the one in her (Simpson’s) case,” said Joseph Tobener, tenant lawyer and partner at Tobener Ravenscroft LLP in San Francisco. “But in a crisis situation like this, tenants shouldn’t feel forced to sign anything their landlord gives them, and they shouldn’t have an eviction on their record. Tenants have the leverage here.”

Irene Bassett also refused to sign a payment deferment plan in April. On April 20th, her landlord issued Irene and her husband a “pay or quit” notice at their Hawthorne, Calif., apartment, which threatened them with eviction filings in three days if they refused to pay rent. Bassett responded that eviction paperwork currently cannot be filed due to pandemic emergency laws.

“A few days ago we received another letter from our landlords saying they still expect rent,” Bassett said. “Expecting rent from me in a time like this is immoral. If I have to choose between food and rent, I choose food.”

Bassett reached out to the Eviction Defense Network (EDN), where a team of lawyers like Elena Popp offer pro bono legal help to tenants in need. Popp said the three-day notice is becoming more popular with landlords.

“Some tenants see a notice like that and panic. Especially if they’re like so many Americans who have trouble accessing legal help, they leave out of fear,” Popp said. “And the court is sending false and misleading notices to tenants, notices that violate the State Judicial Council’s orders.”

We can’t evict you — yet.

Maria del Socorro Serrano received such a notice from the Los Angeles Superior Court on April 17th, which notified her and her husband Jose Garcia that they were being evicted and had five days to respond to the court. They turned to EDN for legal assistance, and are now receiving support for their case.

“I got overwhelmed. We are already under so much pressure because my husband and I lost our jobs in March,” Serrano said. “My heart dropped to the floor.”

EDN and Popp are receiving more requests for assistance than ever, while preparing for what Popp says will be a “tsunami of evictions” when emergency protections are lifted in California. Tenant unions are also trying to keep up with renters who need assistance.

“It’s hard to keep track of the amount of renters that have reached out to us about pressure that’s being put on them to do things against their best interest,” said Jane Demian, caseworker for the Los Angeles Tenants Union. “The landlords should be approaching their lender about mortgage relief during this crisis, instead of this backlash against tenants.”

Without tenant unions and lawyer groups such as EDN, renters who find themselves in dire economic situations are often without resources to help them navigate agreements with landlords. The lawyer operated website Avvo says tenant lawyer fees typically range from $200-$500 an hour. With 58 percent of Americans having less than $1,000 in savings, hiring a lawyer is not an option for most people.

The pressure tactics by landlords can take a toll on the health of their tenants. At the beginning of April, Simpson started suffering from panic attacks. She made it through by talking out her situation with her family and friends, but is still living with the effects. As the eviction moratorium expiration date of July 28th draws closer, she wonders what her living situation will be like in the coming months.

“It’s so upsetting. My landlords might have to wait on some money, but I could end up homeless if I have an eviction on my record,” Simpson said. “It feels like I’m stuck yelling at a wall.”

This article was supported by the Economic Hardship Reporting Project.


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