From just-cause eviction to RENT CONTROL

Alleged “mediation” is incredibly anti-landlord

Landlords need to understand how the just-cause eviction proposal in Boston turns so-called “mediation” into rent control. The term “mediation” itself sounds like a calm, polite process.

The “mediation” proposed in just-cause eviction is unlike any mediation you’ve heard of. Usually, mediation involves two parties given equal standing and presided over by a neutral mediator. The “mediation” being proposed spells out all the rights of tenants, and only the obligations of the landlord. “Mediation” is mandatory for landlords, voluntary for tenants.

Landlords “must mediate” with tenant advocacy groups, who are invited into the process. All the landlord’s tenants will be called into the process. No rights to counsel or help from landlord groups is mentioned. The “mediation” hearing becomes so hostile to the landlord that landlords will be coerced and threatened to reduce rents. Many won’t even raise their rents over 5% because they will fear what the anti-landlord “mediation” process will do.

Here is how the pro-tenant “mediation” process would work:

• When a landlord gives a rent increase notice to a tenant, the landlord must also give a copy of it to the Rental Housing Resource Center (RHRC), Boston’s former rent control board. “These notices shall be accessible to tenant advocacy groups.” Tenant advocacy groups will, therefore, be able to intervene on the side of the tenant.
• “The tenant’s request [for “mediation”] shall prompt referral from the RHRC to a language appropriate tenants’ advocacy organization.” This proposal brings private “advocacy” groups fully into the “city approved mediation” process.
• Landlords “must mediate with individual tenants over the rental increase or, if the individual belongs to a tenants’ advocacy organization, [must mediate] with the organization.” Once again, the private “advocacy” group is incorporated into the “city approved mediation” process.
• “Agreement is voluntary” for the landlord. But the pressure will really be on to influence, coerce, and threaten the landlord into reducing or simply giving up on the rent increase. And this “mediation,”once known, will scare other landlords away from the process, which means choosing to have no rent increases over 5%.

IMPACT ON LANDLORDS of these rules

Lone landlord will be swamped by tenants and advocacy groups

Tenant advocacy groups will clearly be allowed to attend and participate in the mediation process, while the landlord will be alone because most small landlords cannot afford a lawyer. The tenant, however, will have a free legal services lawyer and at least one tenant advocacy group at the “mediation.” All the landlord’s tenants will be accessible to a tenant advocacy group that will “organize” them just like a labor union and bring them to the “mediation.” All these tenants will undoubtedly be allowed to participate if the tenant advocacy groups can participate. These groups will gang up against the landlord, jeering, booing, carrying protest signs, anything they can think of to intimidate the landlord. It’s their chance to lower their rents.

Demands for financial documents

These tenants will demand to see such landlord documents as: income tax returns, a list of all rents by apartment, a list of all rental properties owned, documents of any other financial resources, capital improvements under consideration, and any other documents they can think of. To counteract, the landlord may want to present any information on loans, mortgages, and other liabilities, including unusual expenses. In short, tenants will invade a landlord’s private life and challenge every possible reason for a rent increase.

Turning tenants against their landlord

Perhaps the most persuasive force to lower rent increases will be the landlord’s own tenants. The advocacy groups will radicalize these tenants as much as possible. And what landlord wants to be stuck dealing in everyday operations with their own tenants being as hostile as possible? The advocates will educate tenants about the free rent trick, which can be used to stop a rent increase for a considerable time, since tenants cannot be evicted for not paying rent with a “legal justification.”

Why this “mediation” of rent increases is rent control

Tenant attorneys will argue that the Massachusetts Rent Control Prohibition Act (MGL Ch 40P – Question 9) does not apply to this “mediation” process because, in the language of the Prohibition Act, it does not “require below market rents.” They will argue that the language of the just-cause eviction proposal clearly states that “agreement is voluntary” on the part of the landlord in a “mediation” process.

In answer, we would point out that the goal of this unique form of “mediation” is clearly to reduce rent increases to below 5%. The language of the preamble (introduction) is all about rent levels, not a word about eviction except in raising rents. But good legal grounds say it’s rent control in violation of Question 9, our successful statewide ballot question that outlawed rent control in Massachusetts. The Legislature enacted it into law, as follows.

The Rent Control Prohibition Act clearly says: “The words ‘rent control’ shall mean: (a) any regulation that in any way requires below-market rents for residential properties; and (b) any regulation that is part of a regulatory scheme of rent control as defined in clause (a), including the regulation of...evictions....” We would argue that “in any way” is intended to cover any manner of rent control. Just because the specific amount of a rent increase is not regulated, any reduced amount of rent the landlord decides on during or after “mediation” is a “below market rent.” Moreover, the Prohibition Act says that rent control CAN be enacted if it is “entirely voluntary and uncoerced.” That language is revealing. In no way will any reduced rent increase resulting from “mediation” be “entirely voluntary” or “uncoerced.” This issue may have to be settled in court if just-cause eviction is enacted.