San Francisco property owners are fed up with the city's pandemic rent relief initiatives.
Landlords have resorted to suing the city over a law that allows businesses to forgo paying back rent if they were shut down during the pandemic.
The first suit was filed in San Francisco Superior Court by the San Francisco Apartment Association and the Small Property Owners of San Francisco Institute on Tuesday, according to reporting by the San Francisco Chronicle.
The legislation was passed unanimously by the Board of Supervisors in July. It’s based on a state law excusing a party from a contract because fulfilling it becomes impossible. The local ordinance mainly applies to hair salons, tattoo shops, entertainment venues and gyms.
But according to the suit, property owners in the city were also crippled financially by the pandemic, struggling to pay mortgages when tenants reneged on rent.
The local law is a "ham-fisted, vague, and ultimately illegal Ordinance that unfairly puts its thumb on the scale in favor of one side of countless two-party contracts," according to the complaint.
In addition, Gov. Gavin Newsom's executive order said that no commercial tenants would be relieved of their obligation to pay rent and no landlord restricted from being able to recover rent, said the filing.
And according to the complaint, the law is illegal because it favors tenants instead of landlords, and it affects the burden of proof for presumptions that can be rebutted in court, which California courts have ruled local ordinances can’t do.
Finally, the complaint alleges that the law was too vague, not making clear which businesses were covered at what times, such as a restaurant closed for indoor dining, but still offering takeout and delivery.
Supervisor Dean Preston, who proposed the legislation, defended it in a statement Wednesday evening. According to the statement, the law is similar to existing state law for contracts when the purpose can’t be fulfilled, and that "the government shutdown as a response to COVID fits those conditions squarely."
"If our favorite neighborhood bars or salons have this powerful tool taken away, many may never see a path to recovery," Preston said in the statement. “Shame on the landlord lobby for attacking small businesses on the brink.”
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