What is tenant relocation assistance all about? When are landlords to be held responsible for paying their evicted tenants’ relocation costs?
According to the Rent Stabilization Ordinance (RSO), a landlord must pay monetary compensation for evicted tenant’s relocation costs only in the case where it is no fault of their own. In other words, when the tenant has done nothing wrong, but the landlord wants to evict them for any of the following 7 reasons:
- The landlord wants the rental property for their own occupancy, a resident manager, the landlord’s spouse, children, parents or grandparents.
- If the tenant is affected by renovation work and has decided to voluntarily terminate the tenancy.
- The tenant is being evicted so that the property is demolished, converted to condominiums, or if the property will be permanently removed from the rental housing market.
- The landlord evicts the tenant to comply with a government agency’s Order to Vacate.
- If HUD is both the owner and plaintiff and seeks to vacate the rental prior to a sale.
- If the tenant resides in a residential hotel and the landlord decides to either convert or demolish the rental units.
- If the landlord wants to vacate the rental to convert the property to affordable housing units.
The amount of relocation assistance depends on whether the tenant is either an eligible tenant, qualified tenant or low income tenant.
- Qualified tenants are those who are 62 years of age or older, handicapped, disabled, or those who have one or more minor dependents.
- Eligible tenants are all of those who don’t fall under qualified tenants as explained above and the amount of relocation assistance granted will depend on length of tenancy and income.
- Low income tenants are those whose income is less than 80% of the area median income as defined by the US Department of Housing and Urban Development, regardless of their length of tenancy.
Something worth mentioning is the fact that “Mom and Pop” properties typically pay out less relocation assistance only when the reason for the eviction is caused by owner occupancy requests. These owners can have no more than 4 rental properties and 1 single-family house in the City of Los Angeles.
How to make payments of relocation assistance
An easy and secure way is to create an escrow account for this sole purpose. A third party, if you will, will make sure both parties are satisfied.
Some items to include in an escrow contract include
- Who is to pay whom and specify what this escrow fund is specifically for
- The max amount the landlord is to pay
- Specify requirements for reimbursement of relocation costs such as receipts, written estimates from moving companies, etc.
- Specify what this escrow is willing to cover such as first and last month’s rent, security deposit, utility connection charges, etc.
- Ensure the escrow will be used to pay for the tenant’s relocation costs only after the verification of the tenant’s permanent removal of the rental unit
- Specify how any dispute will be handled
- Define how and when each party will be released of any liability
These are just a few suggestions on what an escrow contract between the landlord, tenant and the escrow company should cover. For a more personalized and concrete contract tailor made for your specific situation, we highly recommend you seek the advice of an attorney.