Rent Board Has No Say In State Mandated Increases, Court Rules

By Jorge Casuso

In a decision with wide-ranging consequences, a California appellate court has ruled that the Santa Monica Rent Control Board has no say in whether landlords can raise the rent of vacated units under a state law.

The 1995 state law -- which allows landlords to raise the rents of vacated rent-controlled units to what the market will bear - was carefully monitored by the rent board, which often required landlords to show that the unit had been vacated voluntarily.

Thursday's ruling by the second appellate district court - which upholds a trail court decision -- will strip the board of its powers to decide whether rent increases are warranted or to require landlords to fill out forms indicating the circumstances of the vacancy.

"If local governments were permitted to adopt regulations defining a preemptive state law and establishing presumptions of violation, chaos would result," the court said. "The information the board can require… is limited to the tenant's name; any additional information may be requested, but not required.

"The legislature did not preserve to local government or its agency the authority to approve or disapprove the amount of a new rental rate contained on an owner's registration form following a vacancy," the court ruled.

The court's decision struck down a rent board regulation that set up additional criteria in order for an owner to implement the Costa-Hawkins state rental law and that placed the burden on the owner to prove that the vacancy qualified for a rent increase.

"Costa-Hawkins does not preserve such authority to the board," the court ruled. "It gives owners the authority to establish rents, with specific exceptions and guidelines."

Attorneys for the rent board argued that the Casta-Hawkins rental act fails to define the word "vacancy." But the appellate court ruled that the term does not require additional definition.

"Notably, the definition in the legal dictionary is fully consistent with the Webster's (dictionary) definition," the court said. "The Legislature had no need to further define the phrase 'voluntary vacancy' because the meaning of the phrase is readily understood."

Landlord representatives hailed the decision as a major victory.

"The court of appeals has confirmed that the rent control board has no business interfering with the state law," said Gordon P. Gitlen, the attorney who represented the plaintiffs in the case. "The rent board doesn't have the right to ay yes or no. They have to stand on the sidelines and say, 'That's not our business.'"