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Santa Monica Landlords' Water Meter Suit Against Rent Board Moves Forward
By Jorge Casuso
July 27, 2017 -- A Santa Monica landlord group can move ahead with a lawsuit against the city's Rent Control Board (RCB) alleging property owners have the right to charge new tenants for water in buildings that have a master meter.
The Superior Court's decision to reject the Rent Board's motion to dismiss the case filed by ACTION Apartment Association last year was handed down on July 14.
“The RCB tried to avoid judicial review of their policy by asserting procedural arguments that are now behind us so that the policy will be reviewed on its merits,” Don Woods, the plaintiff's attorney, said in a statement issued Wednesday.
The defendants have "spent taxpayer money on unsuccessful procedural attempts to avoid a ruling on the legitimacy of their policy," Woods said. "Naively, I thought the RCB would welcome a judicial review of the matter.”
ACTION's lawsuit alleges that under the 1994 Costa-Hawkins Rental Act, which allows landlords to charge market rates when a unit is legally vacated, a housing provider should be allowed to rent the unit with or without utilities, including water.
“This policy of the Rent Control Board places owners of buildings master metered for water at a competitive disadvantage with owners of newer buildings and forces them to pay for the water used by the tenants,” according to the suit.
Rent Board officials counter that once a new rental rate is set, it becomes the Maximum Allowable Rent (MAR) for the unit and cannot be changed, except for the annual rent increases set by the Board.
"Once a MAR is established, you can't collect more," said Stephen Lewis, the Rent Board's General Counsel. "The payment the landlord is passing through in rent under the charter."
The Rent Control Charter, he said, defines rent "as any payment paid by the tenant to the landlord for the landlord's benefit."
Rent Control Regulation 8020(g) defines excess rent as “the charging of any fee arising from the landlord-tenant relationship or pertaining to the continuing occupancy of a unit which is in addition to the lawful rent . . . and which is not authorized by law or a separate agreement as defined in Regulation 3201.”
According to the court, the plaintiffs are seeking the authority to "negotiate with tenants subject to new housing arrangements for those utilities under a ratio utility billing system."
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