City alleges systematic conversion of rent-controlled units to Airbnb rentals violated municipal housing law
The city of Santa Monica has filed a lawsuit against a family of landlords who control more than 25 rent-controlled properties, alleging they illegally converted dozens of apartments into short-term Airbnb rentals and pocketed approximately $18 million over five years.
The Santa Monica City Attorney's Office Consumer Protection Unit filed the complaint Jan. 22 in Los Angeles County Superior Court against Hamid Enayati, also known as Andrew Enayati; Nicole Massarat, also known as Nicole Enayati; Jaleh Forouhar, also known as Jaleh Enayati; Nina Enayati; Nina Property Management Inc.; and numerous limited liability companies they control.
According to the complaint, the defendants rented at least 62 rent-controlled units to short-term guests nearly 3,000 times in violation of the city's Residential Leasing Requirements Ordinance, which generally prohibits residential rentals with initial lease terms of less than one year.
The city is seeking civil penalties of $2,500 per violation, an injunction to stop the alleged illegal rentals, and restitution of the $18 million the defendants allegedly obtained through their scheme.
Elaborate Scheme Alleged
The complaint alleges the Enayatis developed a systematic process to circumvent the city's short-term rental restrictions while maintaining an appearance of compliance.
After long-term tenants vacated rent-controlled units, the defendants would list the apartments on Airbnb for stays typically lasting between 31 and 100 days rather than advertising them for long-term rental, according to the lawsuit.
The defendants allegedly had guests book their actual intended short-term stays through Airbnb but then required them to sign separate one-year lease agreements the landlords never intended to enforce.
"The Enayatis executed written lease agreements that state that the lease is for an initial minimum term of one year while knowing that Airbnb guests would not stay for at least one year," the complaint states.
The lawsuit alleges the defendants used two Airbnb host profiles — one under the name "Nicole," designated as a "Superhost" with 1,610 reviews, and another under "Nina" with 862 reviews — to facilitate the rentals.
Fraudulent Leases and Misrepresentations
According to the complaint, the defendants' lease agreements included addenda claiming units were being "delivered vacant" even though they were fully furnished, with language stating furniture was "for staging purposes" and could be returned.
The leases also required tenants to use the units as their primary residence and included references to the city's rental requirements, even though the defendants allegedly knew short-term Airbnb guests would not meet these criteria.
When prospective guests questioned the contradictions between their short-term Airbnb bookings and the one-year lease terms, the defendants allegedly told them the leases were only meant to protect against squatters or made other misleading statements to induce them to sign.
"Defendants fraudulently executed leases with the above-described clauses knowing that the Airbnb guests could not and would not comply with those provisions in order to avoid scrutiny or reporting of their violations to the city," the complaint states.
Rent Control Violations
The lawsuit also alleges the defendants failed to properly register units with the Santa Monica Rent Control Board or submitted deceptive registration forms listing monthly rents between $5,000 and $10,000 for one- to three-bedroom units.
The city's Rent Control Law limits annual rent increases to a formula-based amount capped at 3% for existing tenants, but allows landlords to reset rents to market rate when new tenancies begin. By converting units to short-term rentals with frequent turnover, the defendants allegedly circumvented rent control protections.
In 2022, the defendants submitted only 11 registration forms for more than 185 rent-controlled units they own. In 2023 and 2025, they submitted zero registration forms, according to the complaint.
Payment records show money from the Airbnb rentals was paid to accounts with a Pacific Palisades billing address and email address associated with the defendants' property management operations, the lawsuit states.
City Enforcement
The city passed the Residential Leasing Requirements Ordinance in 2020 to preserve rental housing for long-term residents and prevent rent increases caused by conversion of apartments to short-term rentals.
The ordinance requires residential rentals to have initial lease terms of at least one year and mandates units be rented unfurnished to tenants using them as their primary residence.
"Preserving rent-controlled apartment homes and keeping rents down are top priorities for the city," Deputy City Attorney Jonathan Frank said in a statement. "The City takes violations of its short-term rental ordinances seriously and will enforce them when needed."
The properties at issue in the lawsuit span addresses throughout Santa Monica, including buildings on Chelsea Avenue, Lincoln Boulevard, Montana Avenue and various numbered streets, collectively containing at least 184 rent-controlled units.
Residents can report suspected violations of the city's rental ordinances to code.enforcement@santamonica.gov.