TORCA Owners Seeking to Occupy Their Units Get Legal Boost

By Jorge Casuso

October 19 -- An Appeals Court last week handed Santa Monica condo owners wishing to occupy their rent-controlled units two victories in one ruling.

In a published decision Thursday, the Second Appellate Court found that a condo owner could evict a tenant in order to move into a unit rented after it was converted under the city's 1984 Tenant Ownership Rights Charter Amendment (TORCA).

In the same ruling, the court struck down as illegal a Rent Control Board regulation stating that if a condo owner filed an owner-occupancy eviction and dismissed it before trial it could not be refiled for four years.

This prohibition applied if the owner made technical errors on the eviction notice, the prevailing attorney said.

"There's two very different topics covered by this decision," said Rosario Perry, the attorney representing Yoann Bohbot, the Santa Monica TORCA owner who filed the suit.

"I think the decision rectifies a long-running discrimination against TORCA owners and strikes down a very unfair regulation that hurt owners who attempted to do the evictions by themselves or hired layers who weren't familiar with the rent control law," Perry said.

Rent Board officials said they have not decided whether to appeal the decision to the State Supreme Court.

“We’re still evaluating our options,” said David Daniels, the rent board’s general counsel.

“We disagree with the (court’s) analysis,” said Michaelyn Jones, the board’s senior litigation attorney. “But it’s certainly well written, and we will evaluate it.”

With TORCA accounting for some 3,250 of the city’s 30,000 units covered by rent control, last week’s ruling will only have a limited impact, board officials said.

“It’s only owner-occupancy evictions,” Jones said. “The number I don’t think is going to be that large.”

The decision, which overturns a trial court ruling, clarifies a longstanding uncertainty in the two-decades old TORCA law, which allowed landlords between 1984 and 1996 to get out the rental business by converting their apartments into condos.

The law allowed rental units to be converted without a removal permit if the tenants were offered an opportunity to purchase their units and two-thirds supported the conversion application.

While TORCA did not protect tenants from owner-occupancy evictions if they rented after the conversion, the City Council passed an ordinance a few months later that prohibited owner occupancy evictions in all condominium units unless a removal permit had been obtained for the conversion.

“To say the least, these provisions give rise to a potential ambiguity,” wrote Judge P.J. Croskey.

The court ruled that the ordinance did not apply to TORCA units.

"We conclude," the three-judge panel ruled unanimously, "that the RCL (Rent Control Law) provision prohibiting owner-occupancy evictions in conversions, unless a removal permit has been obtained, was clearly intended to prohibit owner-occupancy evictions in illegally converted condominiums only.

“The entire TORCA scheme was designed to create an alternative to the procedure of conversion by removal permit,” the court wrote. “If all TORCA conversion owners are required to obtain a removal permit in order to evict non-participating tenants for owner-occupancy, TORCA’s advantage of bypassing the removal permit requirement disappears.”

In its decision, the court also ruled that a landlord who voluntarily dismisses an owner occupancy eviction does not have to wait four years to resubmit the action.

The court found that the Rent Board regulation was “invalid and contrary to statutory law.”

“The Regulation conflicts with the provisions of the Code of Civil Procedure which allow for the voluntary dismissal without prejudice of an unlawful detainer action,” the court ruled.