Idiosyncrasies & Other
Things You Need to Know
by Donna LaPorte, Esq.
WRIGHT, FINLAY & ZAK, LLP
Rent control
- or rent stabilization - has been in force in a number of major
American cities for decades, with most ordinances capping permissible
rental rates and increases, limiting the grounds for eviction,
and regulating landlord conduct. Currently, the trend is in the
direction of "vacancy de-control," which enables a landlord to
set rent at market value upon vacancy of a rent control unit.
Rent control is based on a municipality's desire to preserve affordable
housing, control monthly rents, limit grounds for eviction, and
encourage maintenance of rental properties. Whether these goals
are realistic - or have been achieved - is subject to much debate.
Rent control ordinances vary from state to state, and even city
by city. This article focuses on the Los Angeles Rent Stabilization
Ordinance ("Ordinance"), and, specifically, provides an overview
of rental units covered and the permissible grounds for eviction.
More tenants fall within the Ordinance than in any other city
subject to rent control in California. Strict compliance with
its provisions and applicable state law is required to successfully
evict a tenant. Failure to follow certain procedures may entitle
a tenant to substantial monetary damages. Therefore, the Ordinance
should be scrutinized prior to commencing an eviction. And no
matter the jurisdiction, familiarization with this article will
increase awareness of the issues facing loan servicers.
What Constitutes a "Covered Unit"?
A landlord wishing to evict a tenant from premises located in
Los Angeles must first consider whether the rental unit falls
under the protection of the Ordinance. This is not always clear.
With some exceptions, all dwelling units, suites, condominiums,
duplexes, mobile homes, housing accommodations in guest rooms,
hotels, motels, inns, rooming houses or boarding houses located
in the City of Los Angeles occupied by the same tenant for more
than 60 days are subject to the Ordinance. Major exceptions are
buildings for which a Certificate of Occupancy was issued after
October 1, 1978, detached one-family dwellings (except where 2
or more dwelling units are located on the lot), government subsidized
housing, and luxury units.
Questions often arise regarding illegal units, e.g., converted
garages or new structures added to a building or on a covered
rental property without appropriate permits, and multiple occupancy
of a single-family dwelling. The Los Angeles Rent Stabilization
Division (LARSD) has taken the position that illegal units added
to a building or property subject to the Ordinance, generally
come under the Ordinance, particularly if the tenants have been
paying rent. Case-by-case determinations are made, however. It
is illustrative to note that even utility sheds have been found
to come under the protection of the Ordinance if people are living
in them.
The primary significance of this is that the tenants of illegal
units are entitled to all of the protections afforded by the Ordinance,
including the right to receive payment of relocation fees if the
landlord chooses to evict and/or the Los Angeles Housing Department
("Department") orders the owner to demolish or bring the illegal
unit(s) into compliance with the Los Angeles Housing Code. If
it is necessary for the tenants to permanently vacate the property
for these purposes or for any time in excess of that specified
in the Ordinance, it is the position of the LARSD that the tenants
are entitled to receive relocation fees.
Single Family Dwellings
Another gray area is determining what constitutes an exempt, single
family residence. Landlords are frequently confronted with single
family residences that have been divided into "separate" units
or are occupied by multiple persons claiming to possess separate
portions of the premises. Again, this issue is determined case
by case. Generally, the LARSD considers whether or not the occupants
are living in and sharing the common spaces, e.g., living room,
kitchen, with internal access throughout, or are sharing the rent,
such as in a roommate situation, in which case the property would
be exempt. However, where the house is divided with each person
having his own entrance, and thus exclusive access to his primary
living space, the property most likely falls under the Ordinance.
If a property is subject to the Ordinance, it is then necessary
to determine if the property is properly registered with the Los
Angeles Housing Department (Housing Department) prior to initiating
an eviction action. A key provision of the Ordinance makes it
unlawful for any landlord to demand or accept rents for a rental
unit subject to the Ordinance without first procuring and serving
on the tenant or displaying in a conspicuous place a valid registration
statement or annual renewal registration statement from the Housing
Department. Failure to register the property or annually renew
the registration statement may be raised as a defense by the tenant
in an eviction action. Upon proper registration, a landlord may
demand and collect rents and pursue eviction, if appropriate.
Eviction Under the Ordinance
With the exception of retaliation against the tenant, landlords
in California not subject to rent control laws can generally evict
for almost any reason or no reason at all. However, in rent-controlled
jurisdictions, the grounds upon which a tenancy can be terminated
are limited.
In general, landlords in California, not subject to rent control
laws, can evict for nearly any reason or no reason at all, other
than to retaliate against the tenant. However, in rent control
jurisdictions, some sort of eviction control usually limits the
grounds upon which a tenancy can be terminated. The Ordinance
sets forth twelve legal reasons for evictions in the City of Los
Angeles, which include: 1) failure to pay rent; 2) breach of rental
covenant; 3) committing or permitting a nuisance to the rental
unit or common areas or an unreasonable interference with the
comfort, safety, or enjoyment of any of the other residents of
the same or adjacent buildings; 4) using the rental unit for an
illegal purpose; 5) refusal to renew lease on similar terms for
a like duration; 6) refusal to grant landlord reasonable access
to the unit for purposes of making repairs, inspection, or for
the purpose of showing the rental unit to any prospective purchaser
or mortgagee; 7) person in possession of the rental unit at the
end of the lease term is a subtenant not approved by the landlord;
8) landlord seeks in good faith to move in qualifying family members
or a resident manager; 9) landlord seeks in good faith to demolish
or effect major renovation of the property, as defined in the
Ordinance, 10) landlord seeks in good faith to recover possession
in order to remove the rental unit permanently from rental housing
use; 11) landlord seeks in good faith to recover possession to
comply with any governmental agency's order that necessitates
the vacating of the building housing the rental unit; and 12)
The Secretary of Housing and Urban Development is both the owner
and plaintiff and seeks to recover possession in order to vacate
the property prior to sale and has complied with all tenant notification
requirements under Federal law and administrative regulations.
Reasons 1 through 7 above are based upon circumstances where the
tenant is at fault, whereas, the remaining grounds are not based
on any fault of the tenant. Sale of the property to a new owner,
mere expiration of a rental agreement and/or change in Federal
Section 8 status of a rental unit is not cause for eviction under
the Ordinance.
Special Noticing Procedures
In addition to limiting grounds for eviction, the Ordinance also
imposes special procedural conditions. For example, in addition
to eviction notice requirements mandated by statute and other
local law, the landlord must comply with notice requirements set
forth in the Ordinance. Generally, under California law, prior
to initiating an unlawful detainer action, a three-day written
notice to perform/pay or quit must be served for an eviction based
on fault of the tenant. A 60-day written notice to terminate tenancy
must be served if the tenant has occupied the unit for at least
one year and the landlord wants to end the tenancy through no
fault of the tenant. A 120-day written notice to terminate is
required if a landlord is evicting for the purpose of demolishing
or removing the unit from the rental market.
If a tenant fails to respond to any of these notices, a landlord
can bring a suit to evict the tenant from the premises. However,
the Ordinance further requires that prior to or at the same time
as any of the above notices are served, the landlord must serve
on the tenant a written notice setting forth the reasons for the
termination of the tenancy with specific facts to permit a determination
of the date, place, witnesses and circumstances concerning the
reason. This information may be included in the notice to perform/pay
or quit, or the notice to terminate, or may be included in a separate
notice.
Prior to serving the eviction notices, the Ordinance further imposes
a requirement that declarations including extensive information,
and in some cases supplemental documentation, be filed with the
Housing Department and served on the tenant where the landlord
evicts to move in family members or a resident manager; to demolish
or perform major rehabilitation on the property; to remove the
property permanently from the rental market; to comply with a
governmental order; or for cause based on illegal drug activity
on the premises.
Further notice provisions are required to any tenant whose tenancy
has been terminated under certain no-fault grounds if the landlord
intends to re-rent or does re-rent the housing unit. Additionally,
under some conditions, the landlord must first offer the tenant
a first right of refusal to re-rent the property. What about Relocation?
The Ordinance also mandates that a landlord provide relocation
assistance to any tenant evicted on "no-fault grounds," subject
to certain exceptions. "Qualified tenants" - i.e., 62 or older,
handicapped or parents of minor children - are entitled to a per
unit relocation fee of $5,000; all other tenants are entitled
to a per unit fee of $2,000. The fee paid per unit is to be shared
pro rata among the occupants in the manner provided under the
Ordinance.
In an eviction action, a tenant may raise as an affirmative defense
the failure of the landlord to pay relocation fees or may file
a complaint with the LARSD. Significantly, the Ordinance provides
that the requirement to pay relocation assistance is applicable
to all rental units regardless of whether the rental unit was
created or established in violation of any provision of law.
Conclusion
The Ordinance unequivocally provides that a tenant may raise as
an affirmative defense any failure by the landlord to comply with
the terms of the Ordinance. Failure to comply with the Ordinance
in any aspect may subject a landlord to civil and criminal liability
as well. This article is intended as an overview only of eviction
under Los Angeles Rent Stabilization and is not exhaustive in
scope. It is recommended that a detailed examination of applicable
state and local law, including the Ordinance, be made prior to
initiating any eviction proceedings involving property subject
to rent stabilization in the State of California.
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