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City of Santa Monica Reaches Settlement with Owner of Century Old Downtown Building

Santa Monica Real Estate Company, Roque and MarkHarding Larmore Kutcher & Kozal, LLP  law firm
Harding, Larmore Kutcher & Kozal, LLP

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By Daniel Larios
Special to the Lookout

March 5, 2014 -- The City of Santa Monica has reached a 10-year settlement agreement with the owners and managers of a 49-unit building Downtown that would resolve alleged harassment and privacy complains filed by low-income tenants, some of them formerly homeless.

The agreement -- which received the cooperation of the owners of the complex at 1305 2nd Street -- encompasses everything from the violation of privacy rights using cameras to the remediation of bedbugs in the century-old building. 

“This is a great result for the tenants,” said Deputy City Attorney Gary Rhoades. “It covers nearly all aspects of their tenancy. And we believe the privacy terms dealing with security cameras and guests are the first of their kind in the City and probably the County.”

The agreement resolves alleged harassment, discrimination, and privacy concerns filed by a group of Section 8 tenants who reside at AZ Shores, a rent-controlled building in Santa Monica’s priciest area.

Tenants alleged that parking was taken away from disabled tenants, that management was targeting section 8 tenants by using $5,000 buy out packages and that management would allegedly label some guests as homeless, refusing them entry into the building.

“The tenants LAFLA represented all suffered from some form of disability and were formerly homeless
individuals, and had we not intervened on their behalf, they may very well have become homeless again,” said Denise McGranahan, senior attorney at LAFLA.

“They deserve to live in a safe and affordable home, close to the many services that allow them to continue to live independently,” McGranahan said.

A major point in the agreement was privacy rights and the alleged use of cameras by management.  Tenants claim that they would receive notices from management, telling them they violated some parts of the lease.

Tenants claimed that management enacted these practices to drive them out in order to charge new tenants market rents under State law.  According to the City's Rent Control “Maximum Allowable Rents” Database, rent for the building ranges from $493 to $1,044 per unit per month.

In February of 2009, the previous owner obtained a removal permit from City's Rent Control Board to clear out two units that were “uninhabitable and cannot be made habitable in any feasible manner.” 

In October 2012, the building was sold for $7.5 million to the current owners, according to public records. 

Under the agreement, the management company, Wilshire Skyline, Inc., along with the property owners, would adopt a number of policies that would address tenant concerns.

The terms include adopting a written policy prohibiting discrimination, obtaining fair housing training, record keeping, providing notices to City regarding Section 8 tenants, improving access to social workers and restoring parking for disabled tenants. 

They would also adopt a written tenant harassment policy along with training for managers, with an enhanced $2,500 penalty for any future violations of Santa Monica's Tenant Harassment law.

The major issue of privacy was addressed with the adoption of a new guest policy clarifying tenants' right to have guests, access for the City to review use of security cameras, adjustment to the cameras' line of view to protect privacy, and adoption of “policy on limitations of the uses for the security cameras.”

The agreement also strengthens existing tenant rights, adopts a written policy and procedure for tenants who need repairs, including forms, improved response times and emergency contact information. 

The settlement addresses alleged unfair business practices, including the prohibition of commissions to employees who persuade tenants to leave, give up their parking spaces, or have vehicles towed. It also provides enhanced relocation notices, giving tenants more time to seek legal counsel.

The last area of contention -- spearheaded by the LAFLA -- concerns bed bug remediation.  Under the agreement, management must adopt clear instructions for tenants regarding remediation, use contractors registered with the EPA and provide notice to tenants with disabilities who may need help with moving during remediation.

“We are delighted for our clients, who can now find comfort in knowing that they will be treated properly and respectfully by their landlord,” said Jay Srinivasan, a partner at Gibson, Dunn and Crutcher.

“We were pleased that the lawyers on both sides of this dispute recognized that it was in the best interests of their respective clients to arrive at this result without resort to litigation.”

The owners and manager entered into the agreement as a compromise and without admitting liability, fault or guilt.

The City Attorney’s office, the City’s Housing Division, LAFLA, Gibson Dunn & Crutcher, and Wilshire Skyline, Inc. spent several months investigating the complaints and working out the agreement, City officials said.

“To their credit, the owners and managers began cooperating with us when they learned of the complaints,” said Rhoades. “And so this agreement reflects a great deal of collaborative work by all the parties.”

The City Attorney’s Office, along with LAFLA, will continue to monitor the agreement for a period of ten years, according to city officials.

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