A West Hollywood landlord is urging review of the tenants’ right to return after 10 years under the City’s rent stabilization ordinance.
Hi all,
I urge you to review the RSO laws related to relocation and buyouts. We recently purchased a 10 unit building that was 100% vacated due to a fire in 2016. The building has been sitting 100% vacant for 10 years. We all know how important supply is to the market and we want to bring this building back to life. 3 of the tenants claim they have a right of return and their rental rates are between $400-$700 a month.
They claim they were temporary relocated for $17,500 in 2016. There is no statute of limitations related to their return, although they have been living elsewhere for 10 years, they claim they have a right to return at these $400 rental figures. They have signed on a law firm which is demanding a $500k buyout per tenant.
We have offered them $100K per and they have declined. We are trying to rehab this vacant building which has taken a massive toll on code enforcement and the police due to ongoing transient + drug + break-in activity as reported by adjacent buildings, and the city law is making it incredibly difficult for us to bring this building back to life. The monthly rent of these units is less than the cost of 1 stove from Home Depot.
In addition to property tax, utilities, interest rates, maintenance, city permitting fees, huge legal fees fighting law firms working on contingency, and the $50K + per unit it will take to rehab these units back to life – it is impossible to bring these units back to habitable condition and charge such low rent. There should be an RSO ordinance which identifies the time frame of “temporary relocation” at which point, when the temporary period ends, a new temporary relocation payment should be made, or the tenant waives their right to return. This would incentivize the landlord to remodel the units faster and get the tenants re-housed sooner, instead the previous owner paid everyone one time, and 10 years later under new ownership the tenants want to return.
It takes a massive toll on us as owners, operating these buildings they way Weho residents deserve to be managed, and constantly fighting these ancillary issues related to blanket RSO policies that create major grey areas for landlords forces which us to raise rent in other Weho buildings. These tenants have moved, spent 10 years in new homes, and per RSO law still retain tenancy at our building. I hope we could all agree that a tenant cannot maintain tenancy in 2 apartments at once, at least not for 10 years, and the way code is written- forever.
I hope we could all agree that $500 a month for a 900 sqft apartment is not reasonable. Unless of course given as a density bonus like TOC when % of units must be affordable restricted. I am a large advocate for rent stabilization. We have owned property in Weho for years, and we do not raise the rent. If ever – minimally to help cover increased expenses usually less than 1.5% a year. Keeping people housed is very important to me, growing up my family was evicted 3 times due to large rent increases. The RSO code should put limits on right of return, on rent increases, and so on, but vacating a tenant due to a fire, for 10 years, under the guise of “temporary relocation” is an effective eviction. There should be a rule which states after X amount of years of “temporary relocation” the landlord owes the tenant a buyout; because they effectively evicted them.
We cannot hand tenants unlimited right of returns. There must be a clear cut rule which cites when temporary becomes permanent. I love and appreciate everyone’s work here, I am a big advocate of stabilizing rent. I have a lot of experience buying/rehabbing/managing property. If any of you are interested to hear from a Weho landlord who also care deeply about rent stabilization – I am happy to provide ideas. I care deeply about these issues and I have many ideas to help any of you champion better rent policy.
Thank you all.
Jonathan Rofeim
Why buy this building? Dealing with renters isn’t worth the hassle.
The capital can be put to much better use.
This is quite interesting.
Based on the information above and below, the tenants have a right to return at the stated rents.
Good luck to all of the parties.
As a small building owner and very hands on at my properties, I also believe in rent stabilization, however, rents need to be reasonable to pay for maintenance/upgrades and make a small profit (this is a business after all and we have our own bills too). The tenants were paid $17,500 to relocate, and they did. That is not a temporary relocation fee, that is a buy-out, the lease is done and over. That is a final payment to move out permanently, not be able to come back at any time at the same rate. If they want to move… Read more »
Nice to hear your buildings are being maintained however this is usually not the case for many and possibly the majority of these units. The Code department drags its feet getting around to making owners fix issues. The owners I’ve spoken to are in it for the long game, knowing their property values are forever increasing. These buildings will likely be bulldozed for new developments in the future despite West Hollywood as a whole being an ever-increasingly poor choice due to empty storefronts, an unfocused and unhinged city council making bad decisions for our future and a major identity crisis… Read more »
I don’t know why anyone would want to own rental property in LA, or more specifically, in West Hollywood. I’m not sure how much the ridiculous laws extend to the state. The tenant seems to always have the advantage over landlords, even in the most minute and “gray-area” details. Residential investors are creating an income for themselves, yet they are expected to show charity to any hard-luck story they hear from a tenant, and the law too often supports the tenant. Even squatters are protected by the law and end up costing the owner tens of thousands of dollars to… Read more »
California Civil Code §1102–§1102.17 requires sellers to disclose material facts affecting property value or desirability, tenant rights to return after a fire is considered material. Was this not in the disclosures or did you choose to accept the risk? Have you done a public records search on the prior tenants to see what their current living situations are, e.g. have they moved out of the area, living with a partner or children in which case a 1 bedroom may be too small. This may be a shakedown with few if any actually wanting to move back in after you rehab… Read more »
The law is the law. Should’ve done your due diligence before purchase.
Yep. Was just about to write the same thing.