Information on the Good Cause Eviction Bill Passed by Philadelphia City Council
Good Cause Eviction Bill Passes Philadelphia City Council: Creates More Questions Than Answers
By: Paul Jay Cohen
On December 6, 2018, City Council passed a bill that will prohibit any landlord with a property in the City of Philadelphia from terminating a lease agreement at the end of its term unless the landlord has “good cause” not to renew the lease. This only applies to leases or lease renewals with a term of less than one year. The bill has NOT been signed by the Mayor as of this date, so it is not yet a law.
Unanswered Questions:
- Does the bill apply to non-payment of one month’s rent?
The bill defines “good cause” as including, but not limited to, habitual non-payment or habitual late payment of rent, among other things. It does not specifically state, however, good cause to mean non- payment of one month’s rent. Habitual non-payment would normally seem to mean more than one month’s rent, however, habitual is not defined in the bill. Was non-payment of one month’s rent meant to be one of the included items under the term in the bill “included, but not limited to?” Does non- payment constitute a separate ground for termination? None of this is clear.
- The bill seems to apply retroactively to existing leases. Is this legal?
Article 1, Section 10 of the Constitution of the United States and Article 1, Section 17 of the Constitution of the Commonwealth of Pennsylvania prohibits City Council from passing ex post facto laws or laws that impair the obligation of contracts. When a landlord and tenant entered into a current lease, they both believed it could be terminated at the end of its term for any reason. This bill changes that assumption and material part of the lease. There are federal cases that have held that the term of a lease is one of the most essential bargained-for terms of a rental agreement and that it bears directly on the amount of rent paid. I have spoken with an assistant city solicitor about this and he disagrees with this position and believes that the bill is constitutional. This issue may ultimately have to be decided by the courts.
- Can a landlord terminate a lease at the end of the term if they sell their property?
The simple answer is no. However, the new owner, if they or a member of their immediate family is going to move into the unit, can terminate the lease at the end of the term. The constitutionality of this issue, while not as strong as the above argument, may also have to be decided by the courts.
- Does the Pennsylvania Landlord and Tenant Act preempt this bill?
Section 250.501 of the Pennsylvania Landlord and Tenant Act states that a landlord desirous of repossession of real property from a tenant may obtain possession of the unit upon the termination of the term. This bill effectively infringes on the state rights of a landlord to obtain possession at the end of the term. The courts may ultimately have to decide if the City has the right to change this.
The absurdity of the bill:
If a lease is entered into for less than one year, it is basically a unilateral contract (only one party is bound by it) that lasts forever. Yet, if a lease is entered into for one year or more, that lease has a finite term. Additionally, this bill which was written to protect tenants, will end up hurting them. Short term leases will basically disappear, except for those instances where the tenant pays a premium for them. Why would a landlord enter into a short-term lease that is only short term if the tenant wants it to be but binds the landlord forever?
What’s next?
Councilmember Curtis Jones has said he is willing to meet with landlord representatives to amend the bill. If or when that will happen is unclear at this point. Depending on what gets amended, a decision will have to be made on whether or not to challenge the bill in the courts. For now, I recommend that all new leases and lease renewals be for one year or more. Stay tuned …