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Rent Board to Consider Expiration Dates for Removal Permits

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By Jorge Casuso

October 9, 2019 -- The Santa Monica Rent Board on Thursday will consider a regulation that sets expiration dates for permits that allow an owner to remove units or entire properties from the rental market.

The regulation proposed by the Board's general counsel comes after a California Appeals Court ruled on July 30 that a removal permit does not remove the unit from rent control ("Appeals Court Orders Santa Monica Landlord to Return Units to Rent Control," August 1, 2019).

The Court ordered the owner of the 13-unit Santa Monica apartment building to return the units to rent control a quarter century after the Board gave the go-ahead to remove them from the market.

The proposed regulation "specifies the period during which a removal permit must be acted on" before it expires, said General Counsel Stephen Lewis.

In his staff report, Lewis said the lawsuit revealed that some units or properties were granted removal permits "based on facts that are demonstrably no longer true.

"It makes no sense to permit the owner to act on a long-ago-issued permit to remove units from the market merely because they could have been removed years ago," Lewis said.

City-issued permits do not expire unless they specify an expiration date, he added.

"Thus, there are property owners who clearly, and in some cases admittedly, could not qualify for a removal permit today who could nonetheless remove a unit or units from the market based upon a permit whose appropriateness has long since passed," Lewis wrote.

Under the proposed regulation, a removal permit would expire within 90 days if the unit is uninhabitable or cannot receive a fair return on the market.

"No tenant should be living in an irredeemably uninhabitable unit, and no property owner should be required to continue a condition that deprives him or her of a constitutional right," Lewis wrote.

The permit can be extended by a Rent Board administrator if the owner shows good cause.

For properties being redeveloped with new controlled units, including affordable units, the proposed regulation sets a permit expiration date of two years.

"The development process being what it is, it seems likely that requiring an owner to act on a removal permit too quickly could result in the loss of good, habitable units while the building sits empty for months or a year or more awaiting resolution of all matters necessary for the redevelopment to begin," Lewis wrote.

The deadline can be extended for good cause, but once the removal has taken place it cannot be used even if the period granted has not expired.

Under the proposed regulation, "any permit issued more than a year before the regulation’s adoption would expire immediately," Lewis said.

In addition to setting expiration dates, the proposed regulation clarifies "the scope of authority granted by a removal permit" and "the rent-controlled status of removed units."

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