Board Okays Rent Hikes for Tenants who Don't Live in Units

By Jorge Casuso

Feb. 16 -- In a move that could free up hundreds of apartment units, the Rent Control Board last week passed a resolution that will allow landlords to raise to market rates the rents of units that are not being used by a tenant as a primary residence.

Approved 4 to 1 by the board on Thursday, the resolution -- which will go into effect March 15 -- is an "olive branch" extended to landlords, whose leaders were poised to lobby legislators in Sacramento to pass a similar measure the board feared would be tougher on tenants.

"We're really putting an olive branch out here, and we don't want to see people driven from their homes," board member Alan Toy said after the meeting. "I believe that rent control protections should protect tenants. I don't think rent control should be here to protect people who want to use a unit" only as a place to work.

"We can't always be fair to one particular side of the equation," said Toy, who voted for the regulation. "This is something landlords have talked about for years, and I think it's a legitimate gripe... If we didn't take action locally, there were people willing to take a bill to the state legislature. We didn't want to risk that."

"The concern was that there are units being used as offices and units being held way from people (who could be) living in them," said board chair Betty Mueller, who voted for the measure.

Landlord leaders praised the decision, which they predict will open up hundreds of units to new tenants and protect the system from abuse.

"It's a very enlightened decision by the rent board," said Robert Sullivan, president of Sullivan-Dituri Company Realtors and a leader of Apartment Association of Greater Los Angeles (AAGLA). "We don't want to evict anyone that is living in their apartment. It will be only those people who are abusing the system."

It is unclear how many units would be subject to market rates because they are not being used as primary residences, but the board outlined a number of scenarios -- from units that are only used as work places to units that serve as vacation homes for tenants who live in other cities.

"We really don't know, but I wouldn't be surprised if it's several hundred units at a minimum," Toy said.

How many units would be affected is "a mystery," Mueller said. "The concern is that there are a lot of these out there."

Sullivan, whose company manages about 1,000 rental units in the city, estimates that the regulation will free up as many as 10 percent of Santa Monica's rental units. He said he is aware of between 10 and 12 tenants who do not live in their units, and that the number does not include estimates from the owners of the buildings.

"We have one (tenant) who hasn't been in his apartment in three years. He just mails us a check every three years," Sullivan said. "Another is a movie actor who uses it when he's in town. Some (tenants) use them as offices."

The regulation sets up a process the board hopes will protect tenants from unfair charges by placing the burden of establishing a "prima facie case" on the landlord. If the landlord establishes the case, the burden of proof that "the unit is her or his usual residence of return" shifts to the tenant.

"It provides clear guidelines for a process for tenants and landlords," Mueller said. "The majority of the landlords do scrupulously follow the law, but we felt some landlords may use this to pry into the lives of the tenants. The landlord has to establish the basis. There's quite a process to be followed."

Under the regulation, landlords who seek a determination that a tenant is a "tenant not in occupancy" must file a petition with the board. The petition must be accompanied by supporting documentation, and the tenants and occupants must be notified of the action.

Rent Control Board staff would then review the documents and mail a copy of the petition and supporting documents to the tenant, who would have a chance to challenge the petition. If a tenant denies the assertions, a hearing would be conducted.

Under the regulation, "occupancy" does not require that the tenant "be physically present in the unit at all times or continuously but that it is the tenant's usual residence of return." A number of factors would be weighed as evidence that the unit is not the tenant's residence. These include the following:

• The tenant does not carry on basic living activities at the unit for extended periods of time.
  
  
• Another property or unit is listed as the tenant's place of residence on any motor vehicle registration, driver's license, voter registration, or with any other public agency, including federal, state and local taxing authorities.
  
  
• Utilities for the unit are billed or mailed to a different residential property.
  
  
• The tenant’s personal possessions are not located in the unit.
  
  
• The unit is used primarily for storage, entertaining, or as an office.
  
  
• The tenant is absent from the unit for extended periods of time, other than for military service, hospitalization, vacation, family or friend emergency or care, Peace Corps service, academic sabbatical, or other reasonable temporary or seasonal periods of absence, such as travel necessitated by employment or education.
  
  
• A homeowner's tax exemption or renter's credit for the tenant has been filed for a different property or the tenant is owner of record of a different residential property.
  
  
• The tenant rents more than one unit at the property and the multiple units rented by the tenant comprise more than 1,500 square feet of space. This provision shall only apply if the number of occupants is less than the number of bedrooms in the combined units.
  
  
• The tenant is a corporation or is otherwise not a natural person.

"The rules cover a preponderance of all the reasons a person may not live in one place," said Toy. "People (landlords) will try to take advantage of this. It's about money. This effort to reach out to them should not be taken advantage of."