CITY HALL — Just because apartment units are legally removed from the rental market doesn't mean they're not being illegally rerented.
That's what a city task force recently learned after investigating nearly 60 properties that were withdrawn from the rental market under the state Ellis Act but had not been accounted for by City Hall afterward by demolition permits or changes in use. The Ellis Act allows landlords to go out of the rental business and evict tenants, usually for redevelopment and condo conversions.
"The basic rule is that by an owner withdrawing their property from the rental market, they are leaving that business and understanding the property will not be rerented to new tenants," Adam Radinsky, the head of the Consumer Protection Unit with City Hall, said.
The Ellis Task Force, comprised of staff from the City Attorney, Rent Control, Code Compliance, Santa Monica Police and Planning and Community Development Departments, began meeting last year in response to claims by some evicted tenants that "Ellised" properties were being illegally rerented without City Hall's consent.
The task force found 59 properties — representing 245 units — that had not been demolished or converted, approximately 42 of which were occupied without a required reoccupancy permit. A city ordinance requires that any property that is Ellised after December 1989 and reoccupied — whether it's for rental purposes or not — receive a reoccupancy permit.
About a half dozen of the properties were excused because of subsequent demolition or because they were withdrawn from the rental market before the reoccupancy permit ordinance. Another nine owners applied for reoccupancy permits when contacted by staff while five have retained counsel and are contesting City Hall's request. Approximately three owners who have not responded to requests are being pursued with enforcement.
Ten owners have claimed exemptions or have agreed to apply for a permit.
Under the Ellis Act, withdrawn units that are reinstated as rentals within two years must be offered first to displaced tenants at the rent level they paid at the time of eviction, Radinsky said.
There are several lawsuits that have arisen over the past few years because of Ellis Act violations, including one brought against the owners of a property on Ocean Avenue that resulted in a settlement of $100,000.
City Hall recently also filed a lawsuit against the owner of a four-unit property on Grant Street that was illegally re-rented. The City Attorney's Office is also claiming that the landlord is illegally harassing a new tenant of the building.
There were 513 Ellis withdrawals — comprising 2,461 units — from the inception of the state law in July 1986 to December 31, 2008, according to a report by the Rent Control Board in April. Approximately 110 of the units have returned to the market under rent control.
The number of Ellised properties has been declining in the past 2.5 years, which can be attributed to the downturn in the economy.
Tracy Condon, the Rent Control Board administrator, said that there was a giant wave of withdrawals when the Ellis Act was first enacted, slowing down in the early to mid 1990s.
"I think that there are fewer withdrawals when the economic climate is not as conducive to development," Condon said. "That's also what's been happening the most recent year when we have seen a real reduction. We have also seen more units coming back into the rental market than are being withdrawn."
Condon said that her office does periodically receive complaints from tenants who have been evicted under the Ellis Act and are keeping a close eye on the property.
"That is one reason the Ellis Task Force was established to make sure these properties are not abusing the Ellis Act," she said.
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