State eviction defense fund closer to passage

The California Legislature moved a step closer to establishing an eviction defense fund on Tuesday. The Assembly Judiciary Committee passed AB 1437 even as the bill's author and supporters signaled they will consider changes.

The proposed fund would distribute money to legal aid groups to provide defense for renters fighting eviction.

"The data makes clear that evictions play a key role in driving homelessness," said Assemblyman Jesse S. Gabriel, D-Woodland Hills.

Gabriel, an attorney, added, "This bill will help level the playing field for the most vulnerable of tenants. ... It doesn't put a thumb on the scale. It merely means that eviction proceedings are much more likely to be decided based on the facts and the law."

The bill would create a Homelessness Prevention Fund under the umbrella of the state's Legal Services Trust Fund Commission.

The bill still lacks many specifics on how much money would be distributed and how the state would pay for it. A Judiciary Committee analysis cited statistics showing that in unlawful detainer court proceedings, 90% of landlords have attorneys, compared to 10% of tenants. A 2019 State Bar of California report calculated it would take about $900 million annually to address this gap.

The debate also made clear the bitter battles over unlawful detainer and foreclosure cases that began last year won't go away as the coronavirus pandemic eases. Debra Carlton, executive vice president of state government affairs at the California Apartment Association, testified her group doesn't mind tenants having legal representation.

But she urged the Legislature to look into alternate approaches, such as helping people in need be able to afford their rent. Carlton said AB 1437, as written, would make it easier for "unethical organizations" to delay evictions that are justified.

"It has become commonplace for unethical tenants' attorneys to use boilerplate, pre-drafted pleadings to delay evictions," Carlton said. "Some even forget to change the names of the tenants and the defendants... Many rental property owners have not been paid rent in over a year due to the pandemic."

Karim Drissi, a lobbyist for the California Association of Realtors, then testified that tenants and their attorneys often abuse the current law to delay and stay in their homes. He also said the bill could allow higher income renters to receive legal aid funds they don't need. These statements drew quick objections from several Democratic lawyers serving on the committee.

"Leases and most documents in real estate transactions are also done on preprinted forms," said Committee Chair Mark Stone, D-Scotts Valley. "It's an efficient way of doing business. That's hardly a complaint." Stone added that the State Bar already has "mechanisms to address unethical behavior" among attorneys.

Assemblyman David Chiu, D-San Francisco, went a step further. "I think we could probably trot out at least as many examples of unethical behavior among landlords' attorneys," Chiu said. He then accused the opposition of seeking to preserve "the status quo ... tenants should remain unrepresented."

Gabriel said the opponents appeared to be using the existence of routine legal procedures in order to paint tenants' attorneys as unethical. The former associate with Gibson, Dunn & Crutcher, compared the allegations of underhanded tactics with the discovery disputes that happen in nearly every civil case.

"Part of what concerned me about the opposition is one of the examples they gave of a delay tactic was requesting a jury trial," Gabriel said. "That's one of the fundamental defining features of our system of justice."

The debate followed a year of bitter battles over providing relief to tenants while landlords were financially during the pandemic and resulting shutdown of much of the economy. Lawmakers repeatedly lamented there were no funds in the state budget to help renters directly, as Carlton and others in the housing industry have urged.

But the pandemic may have changed the debate around housing. Lawmakers have introduced a large number of housing bills this term, including a pair of Chiu's bills designed to help tenants and landlords, AB 15 and AB 16. A bill introduced Monday, AB 1401, would abolish parking requirements for new residential construction, an idea designed to make more housing easier and cheaper to build.