Landlord, WIB Holdings, LLC found out first-hand on February 4th that there is no easy way to evict a rent-controlled tenant. WIB sought to evict their low-income tenant, Paul Aron from his abode for which he was paying well below market value (about $1000 less to be exact). The theory of the case was that Aron violated his rental agreement by making unsanctioned upgrades to his unit. A Santa Monica jury ruled unanimously that Paul Aron, was entitled to remain in his home and to top it off, the City of Santa Monica is suing the landlord for harassment of its tenants.
The various rent stabilization ordinances that dot Los Angeles County cities provide a safe haven for renters and a potential nightmare for landlords. One of the most common questions we receive from our clients is how to increase their property values by removing low-paying tenants and replacing them with tenants willing to pay the current market value. Our most common answer? There is no silver bullet.
It is imperative that when you purchase a property, you consider the weight that rent control can play in diminishing your property's value. Low rental income can decimate a cap rate making an income purchase a money drain. If one does choose to take the risk, it is almost certain that he or she will end up paying dividends in either relocation fees or attorney's fees.
If you own a property under rent control and are looking at possibilities for eviction, be sure to contact The Rad Firm, APC at (310) 461-3766. Our attorneys will help you carefully weigh your options to decide on the move that will work best to maintain the value of your investment.
For more information on the case that inspired this article, click here.