When Los Angeles landlords seek to remove tenants from rent-controlled properties, they’re required by law to compensate their renters.
But in a heated housing market, some landlords simply offer a sum of cash to get the renter out. The practice is called “cash for keys,” and is sometimes unethical because tenants don’t get the full amount afforded to them under the law and mistakenly think they’re getting a deal.
Seeking to curb the practice, a Los Angeles City Council committee on Wednesday backed a plan to create a tenant buyout notification program designed to head off unscrupulous landlords.
Tenants’ right groups and renters praised the proposed program at the hearing, saying “cash for keys” offers are targeted at immigrants and non-English speakers.
“Many tenants don’t know their rights,” said Carlos Aguilar, a representative for the Coalition for Economic Survival, “and think they have no other choice than to take that money and leave.”
The proposal is City Hall’s latest attempt to update the city’s rent-control laws amid complaints by housing groups over a shrinking supply of affordable housing.
About 75 percent of the city’s rental stock is rent-controlled, meaning landlords can’t raise the rent on those units by more than 3 percent each year. Housing advocates say those units are crucial to making Los Angeles affordable for lower income and middle-class residents.
During an economic upswing, landlords more frequently seek to remove tenants and turn rental buildings into condominiums or upgrade the units. By law, they’re required to buy out their tenants — paying them anywhere from $7,900-$19,700 — and give them adequate time to move out.
Some renters and landlords cut fair deals, according to housing advocates, but in other cases, the landlords don’t tell the tenants of the law, and instead push them out quickly by offering a sum of money.
The city’s proposal is modeled after a Santa Monica ordinance, which requires a landlord to provide a renter written disclosure of the tenant’s rights. Los Angeles landlords would also have to file a copy of the buyout agreement under the proposed law.
Apartment groups spoke out against the proposal at Wednesday’s hearing, with Jim Clarke, a consultant with the Apartment Association of Greater Los Angeles, calling it unnecessary.
He accused the city of “taking the side of the tenants with regards to the voluntary and private negotiations.”
The proposal, which must be drafted by the Los Angeles City Attorney, now heads to the full City Council for approval.