By Ann K. Williams
Lookout Staff

April 14, 2011 --After hearing from tenants who live at the Embassy Suites Tuesday night, the city council asked City Attorney Marsha Moutrie to let the renters know where they stand in a dispute between the city and their landlords.

“The City Attorney's Office has worked hand in hand with the Rent Control Board,” Moutrie said, adding that both entities' “primary interest is protecting the welfare of tenants and also protecting affordable housing stock in Santa Monica.”

But the news out of closed session called for caution, said Moutrie.

The city and the Rent Control Board recently lost in the Court of Appeal, and “it is possible that with the case returned to the trial court....there is a distinct possibility that the city and the Rent Control Board will lose again,” she said.

The landlords, Embassy LLC and PRG Embassy, LP, are claiming their right to go out of the residential rental business, a right protected by state law, the Rent Control Board's General Counsel Michaelyn Jones told the Lookout Wednesday.

Early in the past decade, the Embassy Suites signed an agreement – under protest – in which 19 of the property's 38 units were designated rent control units, Jones said. The other 19 units were designated hotel rooms.

One of the provisions of the agreement was that the landlord waived its Ellis act rights, which include the right to go out of the rental business, Jones said.

But state law is clear that “if you don't want to be a landlord, you don't have to be a landlord,” said Jones.

The city and Rent Control Board initially won in trial court, but on appeal, the trial court's decision was overturned.

The vagaries of the case are such that the city and the Rent Control Board can return to trial court, but they are prepared to try another tack.

“You don't duke it out when you see the writing on the wall,” Jones said.

If the city and Rent Control Board lose this trial, the tenants may be evicted immediately.

Jones was concerned that the tenants are suffering because the attorneys can't tell them more about what's happening. To do so would be a violation of attorney/client privilege, she said.

“I empathize with the tenants,” Jones said. “I know they are suffering because of this. This is their home.”

Moutrie told the council and the public that a member of her staff and someone from the Rent Control Board will be available to answer the tenants' questions as the case proceeds.