Posted August 18, 20223:20 pm
The apartment industry won a significant legal battle this month, when an appeals court invalidated a Cleveland Housing Court rule that required landlords seeking evictions to comply with the city's lead-safe certification mandate.
Members of the Lead Safe Cleveland Coalition, a broad-based group focused on curbing childhood lead poisoning, viewed the rule as a key tool for forcing property owners to clean up rental homes. But landlords, and the Northern Ohio Apartment Association, saw the edict as a judicial overreach.
On Aug. 11, a three-judge panel in Cleveland agreed.
"There is no authority in the statute for preventing an eviction," the judges wrote, citing state law. "If the property is in violation of (Cleveland's lead-safe ordinance) or any other health and safety law, the remedy is to prohibit the re-rental of the property until the conditions have been corrected. Preventing an eviction precludes correction of unsafe conditions."
Coalition leaders said they're reviewing the decision and discussing how to respond.
Meanwhile, on similar grounds, the apartment association expects to protest a 2017 housing court rule that requires landlords pursuing evictions to list their properties on the city's rental registry.
"We're not done. I promise you that," said Ralph McGreevy, the trade group's executive vice president and chief operating officer. "We're not done."
Cleveland City Council passed a lead-safe ordinance in 2019, requiring residential rentals built before 1978 to be certified as safe — not free of lead, but free of hazards — before March 1, 2023. Officials started rolling out the program last year, imposing deadlines for certification by ZIP code on a quarterly basis. So far, compliance is low, at fewer than 20% of units citywide.
In early 2021, Cleveland Housing Court Judge W. Moná Scott made compliance a prerequisite for evictions. Her rule requires landlords to document whether a unit is lead-safe, working toward certification or exempt.
After hearing from frustrated landlords and lawyers, the apartment association hired law firm Dworken & Bernstein to challenge the rule. Their test case was an eviction lawsuit filed by the owner of Shaker House, an apartment building on the city's East Side.
The tenant had not paid rent in several months. The landlord, an affiliate of Cleveland-based Capital Properties Management Ltd., did not provide lead-safe certification paperwork — and argued from the start that the housing court's rule was unenforceable.
The case, filed in August 2021, pinballed through the court system before landing in the Eighth District Court of Appeals. Meanwhile, the tenant stayed put — and kept quiet during the legal dispute. He has not paid rent in more than a year, an attorney for the landlord confirmed.
"This decision sends a message to this court and other courts," said Grant Keating, a partner at Dworken & Bernstein's Cleveland office. "They need to follow the statutes. They can't rewrite them."
Through a spokesman, Scott declined to comment, citing judicial codes of conduct.
The housing court cannot appeal the decision. The only person with appeal rights is the tenant, who never attempted to defend himself.
Eleven interested parties, including the Legal Aid Society of Cleveland, the George Gund Foundation and the Schubert Center for Child Studies at Case Western Reserve University, advocated for the rule in an amicus brief filed with the appeals court. But they had no standing in the case.
Abigail Staudt, a managing attorney at the Legal Aid Society, said those advocates were dismayed by the ruling. But, she noted, the city has other avenues for enforcing the lead-safe housing law, by sending enforcement notices to unresponsive property owners and filing criminal complaints in housing court.
And the coalition is preparing to unveil broader incentives for property owners who comply.
"All of these different parts of our community have been advancing the ball," Staudt said. "So while we're disappointed about the outcome of this case, it doesn't mean that this is the only way that we're going to reach our goals."
The housing court rule helped with compliance, though it's difficult to quantify the impact, said Sally Martin, the city's director of building and housing. Her staff has been sending out notices to landlords and recently filed an initial batch of lead-related lawsuits against errant property owners, Martin said.
Public records show that the owner of Shaker House obtained lead-safe certification for that property in September — after filing the eviction case. In general, major apartment owners and operators with well-maintained and renovated properties are complying with the law.
Mom-and-pop landlords, who control an estimated 60% of the city's roughly 100,000 rental units, are much harder to reach. And the low failure rate on reports submitted to the city indicates that private-sector testers are not seeing the worst-off properties yet.
Starting in the fall, the coalition plans to increase the amount of funding — a mix of loans and grants — that property owners can tap to address lead hazards. And landlords will be able to use that money for a wider range of projects, such as window replacements.
The coalition also will make grants available to all property owners, regardless of income.
Higher-income applicants will receive a blended loan-and-grant package, while lower-income owners will be eligible for a grant of up to $12,000, said Emily Lundgard, a senior program director at Enterprise Community Partners, a nonprofit group that is part of the public-private coalition.
Drawing on $115 million in funding commitments, the partners also will boost incentive payments to landlords who obtain certifications.
"We're going to try to make this as simple as possible for all property owners," Lundgard said.
The coalition aims to spend the money, including pledges from the Cleveland Clinic and the city, by 2028. So far, though, landlords have been slow to seek funding. Without the cudgel of the housing court rule, expanded incentives and aid are even more important, advocates said.
Keating suggested that a better way to increase compliance would be to allow evictions, bar re-rental of the units and help the landlords access funding to address lead hazards. Some repairs can't safely occur with tenants in place. And some tenants have used the housing court rule to avoid paying rent, while blocking testers from accessing their units.
The appeals court ruling won't impact many members of the apartment association, McGreevy said. The group represents professional landlords who, by and large, are complying with the lead-safe law.
But McGreevy believed it was important to take a stand on behalf of the broader real estate industry.
"This case, to me, was about someone stepping outside of their judicial role," he said. "Who did it affect? It affected the small landlords. I've heard from a lot of them. That's not my crowd. But we care that the courts everywhere are following the law."
Original story can be found at Crain's Cleveland Business: Cleveland landlords seeking evictions don't need to prove their properties are lead-safe, appeals court rules