Jan 2020

Philadelphia Passes Renter’s Right to Counsel Ordinance

In November 2019, the Philadelphia City Council unanimously passed a tenant’s right to counsel ordinance titled “Legal Representation in Landlord Tenant Court,” which gives qualified low-income tenants guaranteed access to an attorney. Mayor Jim Kenney signed this tenant’s right to counsel into law on December 4, 2019, officially adding the ordinance to the Philadelphia code.

Philadelphia is not the first city to pass this type of legislation, which could significantly impact multifamily landlords. New York City was the first city in the United States to give tenants a right to counsel, which took place in 2017. Several other cities followed suit including San Francisco, Newark, and Cleveland. Other municipalities have passed or are in the process of passing similar legislation as well.

Under the new legislation in Philadelphia, tenants with an income under 200% of the federal poverty guidelines as established by the U.S. Department of Health and Human Services (which are $25,520 for a single person and $52,400 for a family of four, for 2020) would be eligible for free legal representation in eviction proceedings, other tenancy terminations, proceedings that are the functional equivalent of eviction, and first-time appeals of such proceedings.

The Philadelphia Bar Association supported the measure, citing a study conducted by Stout Risius Ross, LLC (Stout), which found that if the city invested $3.5 million towards providing legal counsel for low-income tenants in eviction proceedings, Philadelphia would save approximately $45.2 million a year on homeless shelters and public benefits. Unfortunately, the study failed to include any data about the potential monetary impact of this ordinance on landlords. However, the authors predicted more contested eviction cases, longer negotiated time for tenants to vacate, and more favorable outcomes for tenants, which suggests that the new ordinance may negatively impact Philadelphia landlords.

In Philadelphia, the renter’s right to counsel will be phased in over the course of five years or more. The city’s nonprofit legal service providers will represent qualified low-income tenants, financed by a budget of $2.1 million for the first year, to be increased as needed — and the need is expected to grow as more tenants become aware of their right to counsel.

The hearing on the proposed ordinance drew a huge crowd, many of whom testified about the adverse effects of eviction over the course of two hours. From housing advocates to tenants to attorneys, the committee about to vote on the bill heard stories of how tenants were terrified of being evicted.

This fear was further supported by the Philadelphia Bar Association report that found unrepresented tenants faced “disruptive displacement” 78% of the time. Tenants represented by legal counsel, however, have a 95% chance of resolving the eviction without disruptive displacement.

The ordinance isn’t aimed at stopping eviction proceedings, but rather toward giving tenants an opportunity to navigate through the court process, work out payment schedules, or simply leave their residences on better terms. The right to counsel legislation follows in the footsteps of the Philadelphia Eviction Prevention Project, which was established to provide assistance to low-income tenants. Since it began in 2017, the project has helped over 2,000 tenants secure legal representation and provided advice to over 3,500 individuals through a tenant helpline.

Despite the emergence of proposed renter’s right to counsel bills in other places, their incorporation into law isn’t a foregone conclusion. Landlord groups have been forcefully speaking out against this type of ordinance, which could make other city councils more reluctant to pass them.

“What they are doing is encouraging people, if they don’t pay their rent, that they will get free legal representation,” said Harvey Spear, president of the Homeowners Association of Philadelphia (HAPCO).

Chris Somers, president of the Greater Philadelphia Association of Realtors, warns that a renter’s right to counsel could discourage people from investing in rental properties and discriminates against property owners “who cannot or do not have the financial capability to engage lawyers.”

Despite landlords’ critiques, the movement toward a tenant’s right of counsel is a strong one with housing advocates arguing that eviction has become a national epidemic. Housing advocate Matthew Desmond estimates that about four eviction notices were filed across the United States every minute in 2016, adding up to 2.3 million. Higher housing costs, fewer available units, and stagnant wages are three factors that contribute to the rate of eviction, say housing advocates.

In Philadelphia specifically, Desmond’s research uncovered 20,000 eviction cases per year, making the City of Brotherly Love the fourth highest among large American cities for total evictions.

While there’s no guarantee that the tenant’s right to counsel is coming soon to a location near you, it might not be too far into the future either. If you’re a multifamily landlord, it’s certainly an area of the law you’ll want to keep an eye on.

If you are a concerned landlord with questions about how this ordinance will affect your rights during an eviction, contact real estate attorney Michael Haviland at 856-354-7700 or 215-963-9520 or send us a message. Our experienced real estate team at Earp Cohn P.C. can help you navigate the process and make sure your interests are well represented.