Perhaps you have heard the good news by now. If you have not, the Superior Court of the County of Los Angeles granted ACTION’s request for attorneys’ fees in the case entitled ACTION vs. Santa Monica Rent Control Board, which successfully invalidated the Rent Control Board’s regulation requiring landlords to pay interest on security deposits. The Court of Appeal decision made it abundantly clear that the City of Santa Monica, through its Rent Control Board, cannot force landlords to pay interest on security deposits in excess of the amounts earned on the deposits at lending institutions. The Rent Control Board was forcing landlords to pay 3% interest on security deposits and banks were not allowing those rates on deposits. Upon application, the court granted Rosario Perry, the attorney for the ACTION Apartment Association, $200,000. Congratulations to the ACTION Apartment Association and to Rosario Perry.

As you probably already know, Proposition S, the Parcel Tax Initiative passed in June. What this means is that apartment owners again will be taxed, but this time, to help fund the Santa Monica School District. While we are optimistic that the Rent Control Board will authorize a pass-through to the tenants, that remains to be seen. First, the tenants must be willing to pay the increase and if the tenants are presently at fair market value, they may refuse to do so and, instead, vacate. Second, if the unit is already empty or owner occupied, or is an Ellised property, there is no one to absorb the pass-through of the fee. Admittedly, the school district is in financial trouble because the state has not granted as much funding. But is it truly the property owners’ “debt” as opposed to the actual users of the school district system? I know that my position is unpopular, however, the cry of “the sky is falling” as a method to raise support for Proposition S is also misplaced and the state can always change the budget requirements should it choose to do so. Parents of school children can raise funds for after school programs, etc. and the City can contribute more than $3 million instead of planters and flowers in the center meridians of our streets. This may be closing the barn door after the animals have left, but the housing provider is again taxed and his income controlled. Are you aware that the City of Santa Monica spends $10 million per year on the homeless?

Are you aware that the Santa Monica Rent Control Board is actively going out to properties that have previously been exempt from the Rent Control Board? A number of members of Action have told me that the Rent Control Board investigator is actively going out to properties to verify that the owner continues to live on the property and that the property is, in fact, a three unit property. Neither you nor your tenants need grant entrance to the Rent Control Board and, in fact, the Rent Control Board has no authority whatsoever to be on your property, especially since the property is exempt. You may rightfully call the police because of the trespass if you do not desire the intrusion.

Regulation 3304 is alive and the Rent Control Board is conducting hearings to determine whether your tenant is using the rent control property as their principle place of residence or not. If the Rent Control Board finds, based on your evidence that the tenant does not reside in the unit, the rent can be raised to fair market levels. These and other topics of interest will be discussed at the next monthly owner education meeting which, as you know, is the first Monday of every month at Roosevelt Elementary School. See you there.

Finally, thanks are extended to our featured speaker at the June meeting Councilperson Herb Katz, who discussed many local issues with the over 100 members present.