Kimberley A. Farmer focuses her practice on corporate law, business law and commercial real estate transactions. Her work includes business formation and development; mergers and acquisitions; and loan and refinancing transactions. Kimberley...Read More by Author
Philadelphia City Council Proposed Right to Counsel Ordinance for Low-Income Tenants – What Does it Mean for Landlords?
On May 9, 2019, Philadelphia Councilwoman Helen Gym introduced an ordinance to provide the right to counsel for eligible tenants facing eviction.
The proposed ordinance will amend Chapter 9-800 of The Philadelphia Code, entitled “Landlord and Tenant,” by adding a new Section 9-808, entitled “Legal Representation in Landlord Tenant Court,” providing for access to free legal representation to the City of Philadelphia’s low-income residents facing eviction in Landlord Tenant Court.
The ordinance would guarantee free legal representation for eligible renters in proceedings to evict, eject, or terminate the tenancy of a covered individual, or any appeal of such a proceeding. Services would be provided by a city-designated legal services provider. In order to qualify for representation, a renter’s annual gross income must not be in excess of two-hundred percent (200%) of the federal poverty guidelines.
Councilwomen Gym is seeking a $1.5 million allocation in the city’s budget for the initiative. However, an annual total of $5 million or more may be required for all proposed eviction services going forward. In addition to representation of qualifying tenants, the Council has already begun to put renter assistance programs in place, including the education of tenants as to their rights and available resources.
Proponents of the ordinance cite benefits outlined in a November 2018 study, Economic Return on Investment of Providing Counsel in Philadelphia Eviction Cases for Low-Income Tenants, which was commissioned by the Philadelphia Bar Association and conducted by Stout Risius Ross, LLC. The Stout report determined that in approximately 78% of cases, unrepresented tenants are disruptively displaced due to eviction, as compared to represented tenants, who are disruptively displaced due to eviction in only approximately 5% of cases. The report found that eviction disproportionately affects lower income individuals and increases the costs of city services by contributing to homelessness and creating both housing and health issues. However, the report also estimates that spending $3.5 million annually to provide legal counsel for low- income tenants at risk of eviction would save the city approximately $45.2 million per year. The Stout report also found that, even in cases where eviction is not avoided, there are other advantages for represented tenants, including lower penalties and additional time to find alternate housing.
Despite the expected benefits, the proposed ordinance could create additional challenges for landlords. This proposal is another tenant-friendly measure, along with the recently approved “Good Cause” eviction ordinance, that could prevent landlords from separating themselves from delinquent or difficult tenants. The Right to Counsel ordinance would allow certain tenants to receive free legal counsel even if, for example, they do not pay their rent or are otherwise in default under their leases. Landlord groups have argued that this could create situations in which tenants will not pay rent because they know they will be represented in a dispute. Landlords will likely also incur increased legal costs for eviction proceedings and experience longer timeframes for these proceedings.
If the ordinance is passed, Philadelphia will join New York City, San Francisco and Newark, NJ, which have all recently enacted similar legislation, as well as other major cities that are planning programs for tenant access to free legal representation in eviction or other landlord-tenant disputes.
Questions regarding the proposed right-to-counsel ordinance? Contact Kimberley Farmer today.