Floyd filed the suit with fellow landlord Erica Hadley.
A spokesperson for the city’s Law Department declined to comment, stating in an email that the city “will allow the litigation to play out.”
Lawmakers advanced the legislation Monday following a public hearing prompted by Floyd’s original complaint, which alleged that the committee violated the Pennsylvania Sunshine Act by deliberating and reaching a consensus on the bills behind closed doors before the the start of an earlier hearing.
Monday’s hearing was a condition of the settlement the landlords reached with the city.
What new allegations may be added?
O’Rourke, one of Council’s fiercest tenant advocates, has called Floyd’s complaint a “bad faith attempt to delay and to distract.” During Monday’s hearing, he went a step further, saying HAPCO Philadelphia, the city’s largest advocacy group for independent landlords, has been misleading its members.
HAPCO is not a party to the lawsuit, but both Floyd and Hadley belong to the group, which has about 1,000 members.
“I’ve been willing to stand with small landlords on issues that I believe actually affect bottom lines. And if the folks claiming to represent you were doing the same, they would be fighting just as hard on those fronts as well, not misrepresenting a bill that is focused on the worst actors in the industry,” O’Rourke said.
Floyd said Tuesday he is deeply concerned about a provision meant to clarify when a tenant can sue for a rental rebate. Under the legislation, a tenant could file for relief if a landlord collected monthly rent without having an active rental license or certificate of rental suitability. Both are required for landlords to legally collect rent.
He argues that could put small landlords out of business, especially if they are required to repay an amount equal to several months’ rent.
“How can anyone run a business on a small margin and have the risk associated with giving back a year of income? There’s no business that can sustain that,” Floyd said, adding that landlords are “already under a lot of strain.”
Opposition to O’Rourke’s legislation also centers on his proposal to expand “good cause” protections to all renters, regardless of the term of their lease. If passed, the law would require landlords to justify — in writing — why they want to terminate or not renew a lease.
Under the legislation, if a landlord fails to notify their tenant, “the lease shall renew on a month-to-month basis, unless the tenant elects otherwise.” Attorneys for Floyd and Hadley argue that provision effectively “compels” landlords to keep a tenant they want to evict — potentially to their own detriment.
“These restrictions materially alter the economic expectations associated with property ownership by removing predictability in lease duration, limiting exit options, and increasing the risk of prolonged, involuntary tenancies. This uncertainty directly impacts property valuation, financing, and the ability of small landlords to manage risk in an already constrained housing market,” according to the lawsuit.
Advocates say landlords are overstating the potential impacts of expanding “good cause” protections. For example, a landlord could still move to terminate or not renew a lease that has automatically become month-to-month under the law — if they provide proper notification.
It’s just one of the reasons why OnePA Renters United Philadelphia, which helped craft the legislation, is decrying the new allegations.
Frankford renter Theresa Howell said the fight demonstrates the “stark and obvious” power imbalance between landlords and tenants.
“Landlords can hire high-priced lawyers to run into court again and again to stop legislation from passing,” Howell said. “Meanwhile, renters can’t get water leaks fixed or rodents exterminated. And if we dare say anything about it, our landlord can force us out of our home without explaining why.”
The full Council is currently expected to take a final vote on the legislation on April 16. It is unclear what effect the new allegations will have on that timeline.