State Supreme Court Deals Blow to Landlords

By Jorge Casuso

In a blow to Santa Monica landlords, the state supreme court has struck as a precedent a decision barring the Santa Monica Rent Control Board from having a say in whether landlords can raise the rent of vacated units under a state law.

The one-paragraph decision last week - which came after intensive lobbying from rent control advocates - was quickly praised by tenant supporters and denounced by landlords, who had viewed the original trail court decision as a major victory. The trial court decision had been upheld by the second appellate district court in May, which placed an injunction on the rent board.

"This whole area of law is very important to tenants," said Assembley member Sheila Kuehl, who pulled a bill she was sponsoring which would have achieved similar ends. "Rent control boards are really much better equipped than courts to be adjudicating the day to day issues and setting the regulations about cities' own rent control ordinances. It's the best way to protect tenants."

But landlords blasted the decision to depublish the case, charging that the court had caved in to political pressure from tenant activists, including State Senate president pro tem John Burton, who wrote a letter to the court.

"In my mind, it's definitely a political decision by the Supreme Court," said Herb Balter, president of ACTION Apartment Association, which represents Santa Monica landlords. "They're supposed to keep politically out of it."

While depublication will strike the previous ruling in Cabinda vs Rent Control Board as a precedent in other cases, its implications for Santa Monica may be limited.

"The appellate court case and the injunction both stand," said Doris Ganga, acting counsel for the rent board. "We still have to abide by them but not by all of the loose language. It has even more impact on other rent control jurisdictions because they're not bound by the injunction."

"They're still bound by the lower court decision," said Gordon Gitlen, who represented Cabinda in the case. "The lower court determined that it's the landlord that determines the rent" under the Costa Hawkins state rental law.

Until the lower court decision, the 1995 state law -- which allows landlords to raise the rents of vacated rent-controlled units to what the market will bear -- was carefully monitored by the rent board, which often required landlords to show that the unit had been vacated voluntarily.

The appellate court's decision effectively stripped the board of its powers to decide whether rent increases are warranted or to require landlords to fill out forms indicating the circumstances of the vacancy.

"If local governments were permitted to adopt regulations defining a preemptive state law and establishing presumptions of violation, chaos would result," the court ruled in May. "The information the board can require… is limited to the tenant's name; any additional information may be requested, but not required.

"The legislature did not preserve to local government or its agency the authority to approve or disapprove the amount of a new rental rate contained on an owner's registration form following a vacancy," the court ruled.

Kuehl's bill would have turned wide authority back to the rent board.