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Santa Monica Rent Board Could Place Further Restrictions on Tenant Buyouts

Santa Monica Real Estate Company, Roque and Mark

Pacific Park, Santa Monica Pier

Harding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore
Kutcher & Kozal, LLP

By Jonathan Friedman
Associate Editor

February 17, 2015 -- Landlords could soon be prohibited from making extremely limited-time money offers to Santa Monica’s rent-controlled tenants in exchange for their vacating units so they could be replaced by people paying market rates.

Establishing a minimum number of days a tenant has to consider a buyout offer is one of a few items a Rent Control Board subcommittee will discuss with the agency’s staff.

The subcommittee features Board members Steve Duron and Nicole Phillis. 

It was formed following a rent board hearing last earlier this month on whether the board should be in control of buyout agreement records.

Other issues the subcommittee will discuss are whether the rent board can restrict the method used to make offers and if a requirement can be established that offers be made available as public records.

All buyout agreements must be filed as public records after the City Council passed a measure last month intended to strengthen municipal rules to curb harassment of tenants.

Up for discussion was whether the rent board or the City Clerk will receive and handle the files, but this did not stop landlords from talking about why the keeping of these records was a bad idea. 

 “If you make the law much more complicated, technical [and] difficult to comply with, what I predict will happen is you’re going to institutionalize the business of tenant buyouts, and you’re going to create a buyout industry,” Wes Wellman said.

He added that it would lead to a situation of owners hiring agents and buyout amounts rising to a point few people would be willing to turn them down. He said at this time, buyouts are rarely offered.

Board member Todd Flora said it was untrue buyouts weren’t a major deal. His evidence was that it had become a big enough problem that restrictions against them were included in the council’s tenant protection measure.

“Buyouts as a thing are a thing,” he said. “So let’s not question whether they’re under the radar or not.”

The board heard from several tenants who said they had been harassed by landlords who wanted them to take the money and leave, and sometimes gave little time to think about it.

Several board members proposed that tenants should be allowed a minimum of seven days to consider offers.

The council’s measure does not force offers to be made public—only signed agreements have this requirement. But some board members said offers should be available for public review as well. 

Santa Monicans for Renters’ Rights co-Chair Patricia Hoffman addressed the board, and said she supports that concept. 

“It keeps the City better informed about the activity that’s going on to remove tenants from buildings in our city,” Hoffman said.

Stephen Lewis, general counsel to the rent board, said making offers public could raise privacy issues. 

He added that constitutional issues could come up with a proposal that landlords not be allowed to post offers on people’s doors. Flora said this was done as a way to intimidate.

“It has been a powerful statement since blood was thrown on doors, that something put on a door is a powerful statement,” Flora said.

Another proposal that was made, which Lewis said could also raise constitutional issues, was to prevent landlords from telling tenants that if they did not accept buyout offers, they could be evicted through the Ellis Act. 

The 1986 Ellis Act is a State law that allows landlords who want to get out of the rental business to evict tenants and withdraw their units from the market.

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