Get Ready for Just Cause in Los Angeles

September, 2017

Currently, properties built after October 1, 1978, are exempt from the Los Angeles Rent Stabilization Ordinance (LARSO). However, the city may soon eliminate this exemption as it relates to evictions.

 The Los Angeles City Council will soon vote on a measure to expand just cause eviction restrictions to all rentals within the city of Los Angeles. This will impact several hundred thousand apartments as well as individual owners who rent their duplexes or townhomes for supplemental income.   The city proposal was put forth with minimal input from property managers, owners or affordable housing developers.  It was scheduled without gathering data or identifying a clear reason for extending just cause.

In fact, during recent meetings with housing officials, the city was unable to say how many tenants received no cause eviction notices or even how many evictions had been filed city wide. The answer is not that many.  Evictions are down statewide by approximately fifteen percent.  And, based upon our figures, less than one percent of unlawful detainers in non-rent controlled jurisdictions are due to no cause notices.  This is because landlords are not in the business of kicking out good tenants and the majority of renters are good tenants.

Why is the city pushing hard for new just cause restrictions when evictions are down and there is no evidence of widespread abuse? Because the city listens, almost exclusively, to tenant rights organizations who claim that landlords are evicting innocent tenants in mass for illegal reasons.  The city is also concerned about developers buying up properties and evicting residents in mass in order to flip or redevelop the property though they have no data to back this up.

The first reason is false. Simply look at any court unlawful detainer trial docket and you will find few, if any, no cause eviction trials.  The second concern may or may not be legitimate.  The city has no idea how many residents are displaced from non-rent controlled apartments due to new owners wishing to renovate or redevelop properties.  Even assuming this is a problem, a targeted response would be best.  Place eviction restrictions on new buyers or develop expanded relocation regulations to address this situation.  But don’t impose just cause on hundreds of thousands of apartments because of a perceived problem with a subset of owners.  When I asked a housing representative if the city had considered a more targeted approach the response was, “No, what do you suggest?”

While it is not too late to defeat this measure, time is running out. The Los Angeles Housing Community Investment Department will present its recommendations to the City Council sometime in September or October.  Owners and managers are encouraged to write their local councilmember or and or attend any upcoming counsel votes and speak out against the proposal.  Below is a site listing the contact information for your council members:

https://www.lacity.org/your-government/elected-officials/city-council/council-directory

 Just Cause Means More Dangerous Communities

The proposed ordinance would subject several hundred thousand rentals to the LARSO eviction controls. Note that because of California law, the city cannot impose rent restrictions on these apartments – only eviction restrictions.  Thus, any “bad” landlords can simply skirt the eviction restrictions by issuing steep rent increases thereby forcing tenants to move notwithstanding the efforts of the city.

This will leave the law abiding landlords to deal with the adverse effects of LARSO. First and foremost this will result in less safe communities.  Outside of LARSO, if a tenant harasses, stalks, threatens their neighbors or sells drugs, runs a prostitution ring or any other number or community disrupting behavior, a landlord can simply issue a non-renew of the lease or month–to-month tenancy.  This notice does not need to identify neighbors or other witnesses.  It simply tells a tenant that the landlord has decided the relationship will be coming to an end and gives the tenant a full month (or two) to find alternative housing.  If the tenant refuses, then the issues at trial are straightforward.    Tenants remain protected as no landlord can base such a notice on race, sex, religion or any other protected class.  Nor can a landlord use such a notice to retaliate against a tenant for complaining to the landlord or city.  This is the arrangement every owner who has built in Los Angeles after 1978 signed up for.

If the city imposes LARSO on these communities, landlords will then have to follow a more dangerous route to remove bad tenants. The most serious problem is that every eviction notice will need to contain the name of the neighbors/victim, as well as the specific reason why the tenant is being evicted.  In other words, if “Betty Smith” saw a drug deal on the property then the notice would need to identify “Betty Smith” as the witness who will testify in court against the drug dealer. If she witnessed a gang beating, same thing; or if she was the victim of stalking or a sexual assault then her name gets placed on the three-day eviction notice that is given to her drug dealer/gang member/stalker neighbor.   If not, the entire case can be thrown out at trial.  This puts a target on the witness/victims’ back, exposing them and their family to retaliation.  If the tenant refuses to allow his or her name to be identified, the case does not proceed.

We know that many landlords have been unable to remove dangerous tenants from a property because witnesses are rightfully too scared to place themselves and their families in danger. Thus, without a police arrest the drug dealers/gang members/stalkers remain on the rent-controlled property to further threaten and disrupt the community.  This creates a two-tiered system in the city, where non LARSO communities can safely and legally remove dangerous tenants while many rent controlled communities simply have to live with them.  Now the city wants to make every community subject to this dangerous standard.

There are other burdens imposed by LARSO as well, including a higher burden of proof and the requirement to obtain city approval before serving certain types of eviction notices. All will increase the cost of business while diminishing the landlord’s ability to provide a safe community for residents.  Once again, we ask why?  As best as we can tell, because of an unquantified problem with a select subset of landlords that may or may not exist.

Please contact Partner Chris Evans at (800) 577-4587 in our Los Angeles office with any questions.

Kimball, Tirey and St. John LLP is a full service real estate law firm representing residential and commercial property owners and managers. This alert is for general information purposes only. Laws may have changed since this article was published. Before acting, be sure to receive legal advice from our office.  If you have questions, please contact your local KTS office. For contact information, please visit our website: www.kts-law.com. For past Legal Alerts, Questions & Answers and Legal Articles, please consult the resource section of our website.

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