The Plaintiff: Tom the Landlord, who is seeking
to evict his tenant over $850 of unpaid rent. The Defendant: Vera the Tenant, who admits
falling behind on rent, but says she shouldn’t lose her home for it. We’ll hear their stories and see what the
judge has to say on Eviction Court: Two Cents edition! A landlord can’t just kick a tenant out
on a whim… They need to get the OK from the state, and
the way they do that is through a civil process known as eviction, or “summary ejection.” A landmark study by Princeton sociologist
Matthew Desmond estimated that there are almost a million evictions a year in America. That’s 1 out of every 17 renter households. There are many different reasons a landlord
can seek eviction, from lease violations to criminal activity to just wanting to sell
the house. But the vast majority are over unpaid rent. Vera's story is sadly familiar these days. She was working two jobs, in retail and food
service, and when the pandemic struck, both businesses closed their doors. She managed to stay afloat with the increased
unemployment benefits from the CARES Act… until they expired in July. Her restaurant reopened shortly afterwards,
but with drastically shortened hours. With less than half the income she used to
have, she started to fall behind, and only ten days after she failed to pay her rent
on time, she found an eviction notice taped to her door. There’s an assumption that you have to be
deep in debt to get evicted, but that’s actually quite rare. According to The Eviction Lab, the average
amount that triggers an eviction lawsuit is less than one month’s rent. If Vera can’t pay her debt within a few
days, she’ll be summoned to court at a specific date and time. She’ll have one last chance to pay her debts
in full, plus late charges and legal fees, or the court will order a sheriff to remove
her from the property. Most defendants are highly motivated to pay
the money, if they can. They’re probably already living in the most
affordable unit they could find, and moving into a new place means putting down a security
deposit they almost certainly don’t have. And that’s assuming they’d get approved. Most landlords won’t even consider a tenant
with an eviction on their record. This leverage creates a temptation for landlords
to use the eviction system as a kind of state-sponsored debt collections agency, instead of a last
resort. Depending on the state, filing an eviction
lawsuit can be pretty cheap. There are even automated apps that streamline
the process. And the added fees mean extra profit for the
landlord. This has led to a pattern of serial evictions,
where the same tenants are hauled into court month after month, often paying more than
20% extra on their rent every time they fall behind. So, there’s definitely potential for landlords
to abuse the system, but at least the government stepped in this year to put a hold on evictions
during the COVID crisis. Yes, the CDC announced a federal moratorium
on evictions until at least the end of the year, because, y’know, it’s hard to quarantine
without a home. But there are some conditions. It only applies to tenants making less than
100 grand a year, and the tenant must declare in writing that they experienced a loss of
income from COVID, that they have nowhere else to go, and that they tried their best
to find financial assistance. The moratorium doesn’t mean that Vera’s
rent is forgiven--only that she can’t be removed from the premises until 2021. Her landlord is still free to bring her to
court before then, where he can contest her claims, change his pretext to something not
covered by the moratorium, like lease violations, or just hope the tenant hasn’t heard about
the moratorium and will leave on her own. Tom the Landlord has opted to challenge Vera’s
declaration, which may sound cold-hearted, but let’s take a closer look at his side
of the story... 10 years ago, after an injury left Tom unable
to keep working as a plumber, he decided to use his savings as a down payment on two rental
properties and become a full-time landlord. Unfortunately, the job turned out to be a
bit harder than he anticipated. Like many “mom-n-pop” real-estate investors,
the rent Tom collects from his tenants barely covers his mortgages, property taxes, upkeep
and personal living expenses. But, he figures that the increase in home
values will at least allow him to sell the properties in 20 years for enough to retire
on. And then along came COVID. Landlord associations across the country are
mounting legal challenges to the CDC’s moratorium, arguing that it essentially forces property
owners to subsidize their tenant’s housing. The CARES Act provided some relief for owners,
allowing them to defer their mortgage payments for 6-12 months without incurring late fees,
but like the tenants, those debts aren’t forgiven. When the forbearance period ends, Tom will
have to figure out how to pay everything he owes or risk losing his properties. Tom’s done the math, and he just can’t
afford to rack up months of mortgage debt without any rental income. As bad as he might feel for Vera, he doesn’t
think he should be the one to pay for her problems. So his lawyer makes the argument that Vera
hasn’t adequately searched for rental assistance programs, and therefore doesn’t qualify
for the moratorium. We’d like to say that Vera brought evidence
of her applications to numerous government housing grants that had already run dry, and
that the judge summarily dismissed the eviction lawsuit. Case closed! But let’s get real. The majority of people who find themselves
in this situation don’t have the time or information to mount a thorough defense. They can’t afford to bring lawyers with
them. Many aren’t even aware of their rights,
and most don’t show up to court at all, meaning the landlord wins by default. And even though “mom and pop” landlords
like Tom are getting hit hard by the pandemic, reports suggest that the majority of eviction
lawsuits are actually filed by large corporate landlords, owned by investment firms and hedge
funds that are better able to weather the storm. These firms have been somewhat restrained
by the moratorium, but they’re already preparing suits to evict thousands of tenants as soon
as the clock runs out. I suppose we could just blame the pandemic,
but unfortunately, the eviction crisis began well before COVID came along. According to the Bureau of Labor Statistics,
hourly wages have increased only 5 to 25 percent over the last couple decades, while the cost
of renting has skyrocketed by 70 percent. While the number of rental units in America
has increased by 10.9 million, the number of units for $600 or less in inflation-adjusted
dollars has decreased by 4 million. Essentially, all our new units are for high-income
renters, while low-income renters have vastly fewer options to choose from. Today, the majority of renters who make less
than $30K a year are spending over half their income on rent. So, if we’re looking for root causes of
America’s eviction epidemic, a lot of the blame goes to our lack of affordable housing. This is no easy problem to fix, with Congress
unable to agree on how to address it, and local communities opposed to any low-income
development in their neighborhoods. It’s a cold fact of capitalism that real-estate
developers can make more money building homes for rich people than poor people, so that’s
what they’ll continue to do. But the costs get shifted to the public. States spend money processing eviction suits,
landlords have to find new tenants, cities have to expand social services and homeless
facilities, and of course, families are losing their homes, and with them, their ability
to find work. All over debts that are usually less than
$1000. As with most systemic problems, looking for
blame is less productive than looking for solutions. As Clemson professor Elora Raymond put it,
“...is it the tenant’s fault… is it the landlord’s fault? ...I think it doesn’t really matter. Because this doesn’t work.” And that’s our two cents. If you’re caught in a legal jam because
of unpaid rent or debts, there are organizations that can help. Check out our video guide to dealing with
debt collectors to learn more!
