LAW, from page 1 Rent control law in limbo
By Suit pits wealthy tenant against big business landlord BY JOHN WOOD Daily Press Staff Writer
A Santa Monica law aimed at weeding out part-time tenants who abuse rent control needs only to be tweaked before it’s enforced once again, Rent Control Board officials said this week.
Tenant attorneys disagreed. They said the law, which is favored by landlords, is illegal and added they’re confident it will be permanently tossed out when a lawsuit challenging it is heard next year.
The lawsuit was brought by attorney and prominent real estate investor Robert Bisno, who lives in Beverly Hills but keeps a beachfront penthouse apartment in Santa Monica for $1,000 a month, officials said. It pits Bisno against the rent board and, ultimately, against his landlord, Douglas Emmett & Co.
At issue in the lawsuit is regulation 3304, which was suspended by a judge last week pending the upcoming trial. The law allowed landlords to raise the rent on tenants who used their units as vacation homes, or for storage or office space. It was passed by the local rent board earlier this year to appease landlord groups, who had lobbied in Sacramento for a law that would have been even tougher on rent control.
Santa Monica Superior Court Judge James Bascue issued a temporary injunction against regulation 3304 last Wednesday, saying it may be unconstitutional, partially because it allows landlords to set the rent for part-time renters at whatever level they choose.
While tenant groups celebrated victory and said they were confident the law will be permanently tossed out, officials from the rent board, who met in closed session after the judge handed down his ruling, said only minor changes need to be made before the law is again enforced.
Doris Ganga, an attorney for the rent board, said she expects the board to amend the law to satisfy the judge’s concern. She said that probably will mean having the board determine the higher level of rent, perhaps by comparing it to similar units or by taking public testimony during the hearings.
“What he said was that we couldn’t allow the landlords to choose the rent... it had to be the board that sets the rents,” she said, adding that until the rent board determines how to handle the injunction, all pending cases have been stayed.
The rationale behind the law was that rent control is intended to protect full-time residents by stabilizing their living expenses, but wasn’t intended to subsidize the lifestyles of part-timers who don’t need it. Though residents first coalesced around fears that they would be targeted overzealously by landlords, those fears quickly evaporated when filings sharply dropped off months ago.
Attorney Allan Abshez, who brought the case on behalf of Bisno, said he interprets Judge Bascue’s injunction to mean that anybody whose rent was raised under 3304 deserves compensation and can begin paying their old level of rent without fear of eviction.
“The board’s created quite a mess by subjecting people to this,” Abshez said. “I believe the effect of the court’s order is that those people, should they pay their old rent, cannot be evicted.”
Abshez added the rent board was acting out of its jurisdiction to create the regulation because it’s an administrative body, not a legislative one. If 3304 is to survive, it must be approved by voters, he said. But Abshez said Santa Monica voters are unlikely to support the law because it calls for the invasion of tenants’ privacy by landlords who sift through garbage, rifle through cabinets and check refrigerators to determine if a tenant really lives in his unit.
Abshez, who described the law as a “boondoggle for landlords,” was retained by Bisno, an attorney and prominent local real estate investor who, according to City Hall documents, lives in an exclusive enclave of Beverly Hills as well as in a rent-controlled oceanfront place in Santa Monica.
Bisno filed a lawsuit challenging the regulation after Douglas Emmett raised the rent on his apartment at the twin Shores apartment towers south of Ocean Park Boulevard. Bisno pays $1,064 for a two-bedroom, two-bathroom penthouse that could command $4,895 on the open market.
Though Douglas Emmett was successful in winning a rent increase earlier this year, Bisno appealed the ruling and — after the appeal was continued once — it was set to be heard by the rent board itself Dec. 11. Because the appeal had not yet been heard when Bascue issued the injunction, the rent increase was not considered final and Bisno’s rent was returned to the lower level, Ganga said.
As far as any refund due to him, Ganga said Bisno is on his own.
“There are things that people can do, but we don’t do them directly because he has to talk to the landlord about that,” she said.
The rent board will continue discussing its options at the Dec. 11 meeting, Ganga said. Whatever course of action it decides to take, officials will have to gather input from the public and other sources before an amended law ultimately is enforced.
Allan Golad, director of property management for Douglas Emmett, said his company is waiting for the rent board to tweak the law and bring it back.
54D,“The ball’s now in the court of the Santa Monica Rent Control Board to comply with the judge’s ruling,” he said. “This is really in the hands of the Santa Monica Rent Control Board and we’re just hopeful that we’ll come up with a solution that the court finds favorable.”
Though Golad said he hadn’t yet considered it, officials on both sides of the dispute said they expect Douglas Emmett to return to Sacramento and lobby for a tougher law if the regulation isn’t enforced.
“If nothing happens here, I’m sure that Douglas Emmett’s going to go to Sacramento,” said Rosario Perry, a prominent landlord attorney. “With the new governor, it’s kind of an open question what side of the coin he’s on. With the ambiguity of what’s going on in Sacramento, I think the board should be very worried about lobbying, if they don’t do something to rectify this ruling.”
“If nothing happens here, I’m sure that Douglas Emmett’s going to go to Sacramento.” — — ROSARIO PERRY Landlord attorney
As to the notion that 3304 is an invasion of tenants’ privacy, Perry scoffed. He said landlords have long been subjected to the same type of invasions when applying to the board for a “landlord exemption,” which allows live-in owners of buildings with three units or less to charge renters market rates.
“It’s ridiculous,” he said. “Just ridiculous.”
Rosario Perry
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Originally published in the Santa Monica Daily Press print edition on November 26, 2003. Read the original PDF.