Oakland Gets Sued For Law Requiring That Landlords Pay Tenants Up to $12,000 Just to End a Lease

Should you have to pay thousands of dollars before you’re allowed to move back into your own home?

That’s the question raised by a new lawsuit filed against the City of Oakland, California, where a local regulation requires landlords to pay as much $12,000 to tenants if they wish to reoccupy their property. The plaintiffs are Lyndsey and Sharon Ballinger, an active duty military couple who rented out their three-bedroom Oakland home in September 2016 after Sharon was stationed in the D.C. area.

In January of this year, while the Ballingers were out east, the Oakland City Council passed its Uniform Relocation Ordinance, part of which requires that landlords looking to end a rental agreement for the purposes of reoccupying their home pay their tenants a set relocation fee.

The fee is largely determined by the size of the rental property. Renters vacating a studio or single-bedroom unit are entitled to a $6,875 relocation fee. The cost is $8,462 for a two-bed unit, $10,445 for a three-bed or larger unit. Tenants who are low-income, are elderly, or have children are entitled to an additional $2,500.

Renters are entitled to two thirds of the above fees after living in a unit for a year, and they’re entitled to the whole amount if they’ve rented a property for more than two years.

Despite renting out their home well over a year before the city passed its ordinance, the Ballingers were forced to pay their tenants $6,582. before they were allowed to end the lease—which at the time was being renewed on a month-to-month basis.

The intention of the Oakland rental ordinance—giving renters a break in the midst of a severe housing shortage—is noble, says Meriem Hubbard of the Pacific Legal Foundation, a public interest law firm representing the Ballingers. The problem, she says, is that it unfairly shifts the burden for addressing this shortage onto property owners who played no role in creating it.

“Instead of the city figuring out how to get more housing or to get less expensive housing or to develop more properties,” says Hubbard, “what they’re doing is they’re making the landlord pay the tenant to leave.”

Being forced to pay $6,582 to their tenants is hardship for the Ballingers, a young military couple with two small children. It’s more than the military paid the family to move across the country—and according to Hubbard, it’s unconstitutional. It violates the Fifth and Fourteenth Amendments by taking property, in this case the $6,582, without compensation and without a public purpose. The complaint also claims that the law imposes unconstitutional conditions on the Ballingers’ use of their property by requiring they pay the relocation fees before retaking possession of their home, something they are otherwise entitled to do.

Oakland’s relocation regulation is similar to rules on the books in San Francisco, Los Angeles, and Berkeley, all of which could be endangered should the Ballingers win their case.

The lawsuit was filed last week, and it will be a while before any decision on its merits is handed down.