The Philadelphia City Council came together recently to enact an unprecedented package of renter protections designed to assist Philadelphia’s renter community weather the COVID-19 storm and help brace the City for an inevitable torrent of eviction actions. The package, referred to as the Emergency Housing Protection Act (EHPA), was initially comprised of six wide-ranging proposed ordinances which applied to various categories of renters with differing situations distinctly.
The EHPA provides that a residential tenant has faced a “COVID-19 financial hardship” if the tenant or a tenant’s household member has lost income anytime between March 1 and August 31, 2020 due to a number of reasons discussed in the bills. Most residential tenants in the City of Philadelphia will have met at least one of the eligibility criteria.
Additionally, and applicable to only one of the ordinances of the EHPA, the package defines a “small business financial hardship” as a documented loss of income of a small business (with less than 100 total employees, wherever located) due to one or more of the following between March 1 and August 31, 2020:
- A requirement or recommendation by the Governor, Secretary of Health, Mayor, or City Health Commissioner to fully or partially close
- The owner or operator, key employee, or a significant number of employees of the small business was unable to work due to any of the above residential reasons
- The business lost customers or a reduction of business from customers as a result of COVID-19
Due to the laundry list of ways to have faced a financial hardship, virtually every renter in the City will have qualified to receive the protections of the EHPA.
Repayment Plan – Residential Only
One of the most important pieces of the EHPA requires landlords to enter into “Hardship Repayment Agreements” with qualifying tenants. Under Bill 200305, these Hardship Repayment Agreements would enable a residential tenant who has suffered a qualifying COVID-19 financial hardship between March 1 and August 31, 2020, and failed to pay rent normally, to pay the full amount of past rent due to the landlord over a period of nine months until May 30, 2021. Hardship Repayment Agreements must meet a number of statutory requirements and landlords are required to provide notice of tenants’ rights under Hardship Repayment Plans prior to proceeding with eviction plans.
Waiver of Rental Fees – Residential Only
Under Bill 200302, landlords are prohibited from charging or accepting late fees, interest on back rent, or similar charges due from tenants who are late on paying rent. If a landlord accepts, either intentionally or not, such late fees, then the ordinance requires landlords to apply those fees toward future rent if any, or otherwise apply such payments toward any other financial obligations owed by the tenant to the landlord under the applicable lease. Although the bill purports to “void” every residential lease that contains provisions requiring tenants to pay late fees, the practical impact would be to only temporarily void those specific provisions.
Eviction Relief – Residential and Small Businesses
Bill 200295 is the only bill of the EHPA which applies to both residential tenants as well as small business tenants. The bill clarifies that the only legal basis for evicting either a residential or small business tenant in Philadelphia until August 31, 2020 is “to cease or prevent an imminent threat of harm by the person being evicted, including physical harm or harassment.” On July 9, 2020, Governor Tom Wolf extended the statewide moratorium on residential evictions until August 31, 2020 as well. Additionally, the local Landlord-Tenant Court in Philadelphia announced that it will not hold any hearings until after September 2, 2020.
Eviction Diversion Program – Residential Only
The City Council also created an “Eviction Diversion Program” modeled off of the Philadelphia court’s mortgage foreclosure diversion program. Bill 200294’s Eviction Diversion Program requires landlords and tenants to attempt to conciliate any claims for rent prior to landlords opting for eviction proceedings. The bill also requires landlords to inform tenants of their rights under the Eviction Diversion Program and prohibits landlords from evicting any tenants unless they have participated in a conciliation conference with their tenants. This conciliation conference requirement will expire on December 31, 2020.
Self-Help – Residential Only
Although landlords are already prohibited from exercising self-help remedies (such as unilaterally changing locks on doors) against residential tenants, Bill 200304 adds additional penalties against landlords who attempt to illegally lock out tenants and also prohibits tenants from waiving rights against self-help. Additionally, the bill allows a tenant who has been locked out illegally, but has since regained possession of the leasehold estate, to terminate the lease within 30 days of being restored possession thereof. Finally, the bill creates a private right of action for tenants who have been illegally locked out and enables those tenants to recover (i) actual damages, (ii) reasonable attorneys’ fees and court costs, (iii) punitive damages up to $2,000 per violation, and (iv) other relief, including injunctive relief.
Rent Stabilization – Residential Only
The most controversial of the proposed ordinances, Bill 200301, would have prohibited landlords from increasing rents or creating or increasing any relevant fees in residential leases during the COVID-19 emergency period for any tenants who faced a “COVID-19 financial hardship.” At the time, Bill 200301 was the only one that faced opposition in the Philadelphia City Council, and it was held in committee where it did not advance.
