Apartment Owners Sue City Over Inspection Fee

By Susan Reines
Staff Writer

November 16 -- A landlord group, led by the owner of a prominent property management firm, is taking the City to court over an annual $60 fire inspection fee approved by the City Council last year that affects most of Santa Monica’s apartment and commercial buildings.

Property owners contend that the charge for inspecting common areas of multi-family buildings is an illegal tax, while City officials maintain that it is a fee needed to generate money to help run the Fire Department.

Plaintiffs hope to overturn the charge -- which applies to some 7,000 apartment and commercial buildings -- on the grounds that the state constitution prohibits the council from imposing any property-related fee or charge without the consent of either a majority of those affected or two-thirds of all voters.

“If we let the City start all these new fees and put the burden on the property owner, that’s not fair,” said lead plaintiff Robert Sullivan, president of Sullivan-Dituri Company Realtors, one of the city’s largest property management firms. “The City just can’t put a tax on people without the proper procedure.”

Under a resolution passed by the council in June 2003, Sullivan-Dituri must pay the $60 annual fee for each of the buildings with three or more units it manages -- 115 in all -- for a yearly total of almost $7,000, Sullivan said.

Asked whether he would agree to a fee were the City to ask him to accept one, Sullivan said he would have to study the specifics carefully, but added that it was doubtful he would accept any new charge when he had been getting fire inspections free for 45 years.

The lawsuit was announced publicly Friday by the California Apartment Law Information Foundation (CALIF), the organization that filed the suit of behalf of Sullivan and the Apartment Association of Greater Los Angeles.

“It’s a question of having owners’ rights protected,” said Craig Mordoh, CALIF Senior Attorney. “It’s not so much that we object to a fee, it’s that we feel that when you adopt a fee that relates to the ownership of property, there are constitutional requirements that the City must comply with, and they failed to do so.”

While CALIF and Sullivan have cast the $60 charge as a violation of the constitution, City officials have said that the council had the authority to approve such a fee.

“This is not a tax, it is a user fee,” Fire Chief Jim Hone said in June, when the first bills went out and property owners began flooding the City with complaints. “It has been looked at legally.”

Hone said the fee, approved during a budget crunch, allowed the Fire Department to avoid more cuts than it had already sustained.