A pair of Santa Monica landlords paid several former tenants more than $22,000 to escape prosecution by the city for allegedly attempting to skirt rental laws, officials said Monday.
Ross Vaisburg and Daniel Smith, owners of a seven-unit building at 1330 10th Street, paid six months’ rent to each of seven former tenants rather than allow them back into their apartments, officials said.
City Attorney Adam Radinsky said this constituted the “worst so far” manipulation of the Ellis Act, which was passed in 1987.
But Rosario Perry, attorney for the owners, said his clients acted within the law.
“In no respect was that a penalty or a fine,” Perry said.
The Ellis Act allows landlords to evict their tenants if they are quitting the rental business altogether. Once a structure has been “Ellised,” its apartments cannot again be rented unless they are first offered to the old tenants at the previous rate, city officials said.
“We all got 30-day notices,” said Solomon Harris, a five-year resident of the building who was paying $550 a month for his rent-controlled unit. “He didn’t give reasons but said he had done some research and everyone was ineligible” for the reduced rates.
Vaisburg deeded the property to a company run by his friend, Smith, in 2002. Law required the property to remain vacant during the next three years. Radinsky said the city received allegations the units were still being rented.
After Smith filed his intention to re-rent the units with the Rent Control Board, the buildings’ previous tenants were issued letters informing them the units would soon be available again.
He added that Smith and Vaisburg have a history of violating tenant rights laws, including a $20,000 fine they paid the city in 2001 rather than face a tenant-harassment lawsuit.
Perry, who denied the units were rented after the original tenants were evicted, had a different story.
Under the Ellis Act, landlords can opt to pay their former tenants six months’ rent if they decide to go back into business, he said. He also said that the landlords’ family and friends had already claimed the units, leaving none for the former tenants.
Perry said the former tenants sent letters to a post office box that wasn’t being checked because the addressee was out of the country. Perry said he paid two former tenants who contacted him directly.
But with the threat of action by the city attorney’s office for the others, his clients agreed to pay the $22,000 in fines, Radinsky said. The former tenants received between $2,400 and $7,200 each.
If they are not given an opportunity to return to their old units at the original rent, owners are subject to pay “punitive damages” in the amount of six months’ rent.
The landlords have now met their obligations under city law and can re-rent the units at market rates, city officials said.
“The way the Ellis Act is worded, it creates this choice to either offer the unit back or pay the six months in damages,” said Keith Kresge, a rent control attorney for the city. “I don’t know of any case where a displaced tenant has actually been given their unit back.”
Radinsky verified that the city attorney’s office is satisfied that the tenants have been compensated.
In the meantime, Harris said he was frustrated by the system.
“There’s nothing I can do,” he said. “I take the $3,300 and there’s no choice. The law says I’m entitled to re-rent, but he pays the penalty and rents to someone else.
“I had no intention to leave. No one did in that place.”
- Rosario Perry, attorney
Originally published in the Santa Monica Daily Press print edition on April 8, 2003. Read the original PDF.