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President's Message,
March 2002 As you should know by now, SB 985 was signed last year by Governor Davis and became effective January 1, 2002. This law requires, among other things, modifications to existing Rental Agreements and new language in Three-Day Notices to be served on tenants for non-payment of rent. The new forms are now available at the ACTION office to members. Naturally, the Rent Control Board felt it necessary to draft new regulations to further "define" the State Law requirements. Of course, these new regulations do not benefit the property owner and you should become familiar with these new requirements, especially if you own or consider purchasing a TORCA unit. On a more favorable note, the November Ballot will be very interesting to Santa Monica residents. As you may recall, in the past, the Santa Monica Renters' Rights Group touted that the voter population of Santa Monica is dominated 80 percent by renters. However that was a long time ago and since then, there have been many properties that have been converted to condominiums, many properties have been Ellised (gone out of business) and of course, many Owner-Occupancy evictions have replaced tenants with owners and/or relatives of owners. Additionally, now that we have the Costa-Hawkins Vacancy Decontrol, in a typical apartment building there will be a low paying tenant living next door to a fair market value paying tenant. Of course, the fair market value tenant generally recognizes the value of upkeep to a property and is also appreciative of the ability to live in Santa Monica. These voters are different than the low paying renters who believe their rights are superior to the rights of the owner of the property and believe they are entitled to more than low rent. Very few are appreciative that the housing provider is actually subsidizing their rent expenses. Just a little common sense would indicate that if somebody is paying low rent, that the owner of the property is losing the income that he/she should receive. Has any owner ever received a "thank you"? Consider this scenario. Recently, a property owner came into our office and inquired as to the legal effect of a Three-Unit Owner Occupied Exemption. We informed the owner that so long as the owner lives on the property, the exemption would stay in place. However, if the property owner "loses" the exemption either because of a transfer of ownership or because the owner moves off the property, then the Rent Control Board's position is that the exemption has lapsed and the rents should automatically revert to the maximum allowable rent in effect prior to the Exemption Application being granted. The owner asked how this result could be avoided. The owner could immediately evict the tenants if they were there when the exemption was granted. If a new tenant thereafter moves onto the property, the maximum allowable rent is adjusted pursuant to Costa-Hawkins Vacancy Decontrol and, if the exemption is lost, then the rent level should still stay the same. It is ironic that Rent Control in this instance forces the owner to evict the tenant. Finally, since Rosario Perry's success in Action Apartment Association vs. Santa Monica Rent Control Board, the Rent Control Board is wondering how it is going to repay the estimated two million dollars that it forced owners to pay to tenants now that the interest on the security deposit has been determined to be illegal. How much money did you improperly pay to tenants? Do you want your money back? Did the tenant pay taxes on the interest? What a mess the Rent Control Board created just to gouge landlords again. Despite the fact that we live in Santa Monica, we are fortunate to live in the United States of America where Capitalism is the American way. Obviously, we are off to a good start in this New Year and I hope to see all of you at the next ACTION meeting. Bring a friend. At the January meeting, we had informative guest speakers and 100 members. |