Seems like old times with exemption gripes
PACIFIC STREET — A Santa Monica property owner who has been caught lying to the Rent Control Board at least two times in order to receive an exemption from the city’s Rent Control law is being given another chance.
In a unique case of the serial Rent Control exemption applicant Michael Vertz, the owner of a two-unit property at 842-844 Pacific St., he is planning to apply for an exemption from the Rent Control Law for the fourth time, despite being denied twice because he was found to have lied.
The Rent Control Law provides exemptions to owner-occupied properties of three or fewer units. The owner must have lived at the property for at least 30 days to qualify.
Vertz wants to stop paying Rent Control fees and evict someone he calls a “problem tenant.”
Despite the fact Vertz signed the application under penalty of perjury and was denied twice because the board felt he lied about his residency, the Rent Control Board could give him a ‘get out of jail free card’ by not referring his case to the City Attorney.
Since the Rent Control Law does not set a maximum number of times an owner can apply for an exemption, the board’s inaction against Vertz will give him the opportunity to apply again.
Fraudulent testimony and perjury is difficult to prosecute and the board has made referrals to the City Attorney in only a couple of occasions, said Rent Control Administrator Mary Ann Yurkonis.
“People have applied more than once in the past,” she said. “Usually, some cases have been people that applied before they lived on the property and got turned down, and then moved into the property and subsequently got the exemption.”
Between 66 percent and 75 percent of the two-and three-unit properties in Santa Monica are exempt from the Rent Control Law. The Rent Control Board hears about 50 to 60 cases of owner exemption requests every year, Yurkonis said. Most of those exemptions are granted. includes a front house occupied by “problem tenant” Susan Kaplow and her daughter Sari Grossman, and a smaller back house that Vertz claims to be sharing with tenant Jolie Chitwood, a woman who owns a body care company for which Vertz provided consulting.
Kaplow has struggled over the past year, along with boyfriend Alberto Bevacqua, to prove to the board that Vertz is not actually living at the residence and is scheming with Chitwood in order to boot Kaplow out so Chitwood could live in the bigger house.
The Rent Control Charter does state that violations would be referred to the appropriate authorities for criminal prosecution. Bevacqua said the Rent Control Board needs to enforce those regulations, since Vertz’s claims have been found to be fraudulent.
If the board does not abide by its own rules on owner exemption requests, it probably won’t enforce supervision of the residence to ensure the owner is actually living there after exemption is granted, Bevacqua said.
Five years ago, Vertz, who purchased the property in 2002, moved to Florida, where he owned a condominium and had a license to practice real estate.
Vertz first applied for the owner’s exemption about three years ago, but withdrew his application before the hearing because he did not live at the residence for at least 50 percent of the time, as required by law.
The hearing officer recommended the board deny Vertz’ second attempt this summer because he had failed to sustain his burden of proving residency at the Pacific Street property.
During his third, and most recent application, a different hearing officer recommended to the board it grant the exemption, because she felt he had provided sufficient evidence, including credit card statements and receipts from transactions made in the Los Angeles area, and memberships to 24 Hour Fitness and the Museum of Contemporary Art.
“Although the hearing officer admits that Mr. Vertz has not been entirely honest with the board in prior applications, Mr. Vertz’s ties to Florida have decreased since the last hearing and the major indicators of his presence in Santa Monica... all point to his permanent residency at the Pacific Street property,” a Rent Control staff report states.
But Vertz is still living in Florida, Kaplow claims, and does not intend to live permanently at the property. Not only has she not seen Vertz or his green Infiniti parked on the street much since she moved in three years ago, the back house is not large enough to accommodate Chitwood and Vertz, who do not have a romantic relationship, according to Kaplow.
But Vertz is intentionally avoiding Kaplow, the staff report states, resulting in the limited sightings. The landlord also claims to use a separate rear entrance.
During the hearing on Oct. 26, four people, including Bevacqua and Grossman, testified against Vertz, claiming they had seen him only a handful of times at the back house. Those who testified included Grossman’s friends, who said they had never seen Vertz during their numerous visits to the house.
Rent Control commissioners said the evidence provided does not prove, in their minds, that Vertz lives at the house.
“His efforts not to be seen by the tenants really puzzles me if he really wants to prove his life there,” said Rent Control Commissioner Betty Mueller during the hearing.
Rent Control Vice Chairman Joel Koury said he does not see how credit card receipts would prove his connection to the property. Koury said he expects to see Vertz back in the hearing room in a few months w∫ith more evidence of residency.
“This is a man who has been dishonest with the board on previous occasions,” Koury said at the hearing.
Originally published in the Santa Monica Daily Press print edition on November 6, 2006. Read the original PDF.