Small Business Owner Still Fighting Los Angeles COVID-era Eviction Ban 

In August, California property owners scored a victory at the Ninth Circuit Court of Appeals. But their battle is far from over. In an important ruling, the court reinstated Howard Iten’s legal challenge to Los Angeles County’s COVID-19 temporary eviction ban. That’s the good news. The bad news for Mr. Iten, and thousands of other LA County rental property owners, is that they still have a very long road ahead before they can recover from being forced to provide free public housing during the pandemic. If they ever do.

Mr. Iten is a retired auto mechanic who began leasing his commercial property to supplement his retirement. When COVID hit, Mr. Iten’s tenant, an auto repair franchisee, claimed that his ability to pay rent was “adversely affected” by the pandemic, even though his business was deemed “essential” and remained open. Thanks to the county’s eviction ban, the tenant stopped paying rent, and refused to leave.

Mr. Iten had no recourse — the county prevented him from trying to evict the non-paying tenant, or from even asking him for the rent. The county also threatened to impose serious criminal and civil penalties on any property owner who tried to oust a non-rent-paying tenant, even if that attempt was in good faith.

The tenant’s refusal to pay the rent he owed continued throughout the pandemic. And to make matters worse, the tenant broke his word a second time when he refused to pay rent for a renewal of the lease, which Mr. Iten agreed to in an effort to stem the financial bleeding. Adding insult to injury, the county not only prohibited Mr. Iten from evicting the nonpaying tenant, but also from attempting to collect overdue rent until a year after the county lifted the prohibition. And late fees or interest? Forget it.

While the county claimed the eviction ban was to “keep people in their homes or stop the spread of the virus,” it didn’t care that doing so was done on the backs of people like Mr. Iten who rely on the timely payment of rent to meet their own financial obligations.

Left without any other options, Mr. Iten sued the county, arguing the eviction ban violated his federal civil rights. The U.S. Constitution’s Contracts Clause prohibits states and municipal governments from adopting any “Law impairing the Obligation of Contracts.” The ban did just that: it effectively voided the term in Mr. Iten’s lease with his tenant that the tenant could remain on the property only as long as he timely paid rent.

To defeat Mr. Iten’s claim, the county took a shocking position: it argued that its eviction ban didn’t prohibit him from trying to evict his tenant for nonpayment of rent. How could that be? After all, the county’s own law plainly said that property owners could not use the usual eviction process. The county took refuge in a technical argument — it claimed that because the tenant did not provide Mr. Iten with the required formal monthly notices explaining why he wouldn’t pay rent, the county’s ban did not stand in the way. But the tenant had no incentive to provide formal notice, and never did so.

Unfortunately, the trial court agreed with the county and ruled that Mr. Iten should have tried to evict his tenant, despite the ever-present risk of serious criminal penalties. However, the Ninth Circuit disagreed and held that Mr. Iten could continue his legal case because the county’s eviction ban threatened him with penalties if he tried to evict, even if the county argued otherwise.

The appeals court sent the case back to determine whether the eviction ban interfered with Iten’s rental agreement with his tenant and violated Mr. Iten’s civil and constitutional rights.

The decision to keep the courthouse door open for Mr. Iten and others like him is a step in the right direction, no doubt. But he will now have to make his case to the district court and prove that the county interfered with his constitutional rights. So, Mr. Iten has to endure yet another round of court hearings.

But the Ninth Circuit gave him, and other rental property owners, hope that maybe there is a light at the end of the tunnel. But it is still a very long tunnel indeed.