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Santa Monica Rent Board Proposes Tweaks to Tenant Protections

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

Convention and Visitors Bureau Santa Monica

By Jonathan Friedman
Associate Editor

August 12, 2015 -- A public hearing will take place Thursday before the Santa Monica Rent Control Board about a proposal that officials say will further close a loophole owners had used to gain exemptions from rent control.

Owners are exempt from rent control if the property has three or fewer units and the owner uses at least one as a “principal place of residence.” Officials say some owners had abused this rule by temporarily living in a unit to gain the exemption, and then moving.

To remedy this alleged problem, the Rent Board recently approved a rule requiring owners to apply for exemptions every year.

Staff has further proposed to clarify what “principal place of residence” means, because some board members say the current description the City's rent control law is ambiguous. This will be the subject of Thursday’s hearing.

The main portion of the current definition says “a principal place of residence” is a “dwelling place where the person actually resides a majority of the time.”

Some board members said at a meeting last month that this could be problematic because some people spend more time at work than they do at home.

A proposal that the definition be where somebody sleeps also had objections because some people have jobs that require extensive travel and sleeping in other locations.

A new definition proposed by staff calls “a principal place of residence” a “dwelling place in which his or her habitation is fixed, wherein the person has the intention of remaining, and to which, whenever he or she is absent, the person has the intention of returning.”

An owner must live in a unit on the property for 120 days before claiming an exemption, and some board members proposed that this waiting period be extended to further curb abuses of the system.

J. Stephen Lewis, the board’s general counsel, wrote in a staff report that extending the waiting period is not advisable.

“Lengthening the time before which an owner may apply for an owner-occupancy exemption may be problematic in the absence of evidence that it is necessary,” Lewis wrote.

He added, “Staff is aware of no current evidence that the existing 120-day period is too short” to make an assessment of an owner’s residency status.

If an owner is cheating the system, Lewis wrote, then the person is more likely to get caught by the new regulation requiring annual exemption applications than because of a longer wait period.

Also at the meeting on Thursday, the board will consider whether owners should be allowed to pass City penalties for excessive water use, or a portion of them, on to tenants.

The City is expected to begin assessing penalties next year in an effort to curb water use.

In a report to the board, staff did not give a recommendation, but asked members to consider various questions that might lead them to a conclusion.

Among the questions are what water conservation efforts owners should be required to take before they could pass penalties on to tenants and how the penalties should be divided among the tenants.

If the board determines owners should be allowed to pass on the penalties, they would ask staff to draft legal language. The board could also call for a public hearing at a future meeting to see what residents think about this idea.

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