Santa Monica Motel Case Provides Test of Ellis Act

A Santa Monica Superior Court Judge is expected to decide on Aug. 19 whether three landlords can use a new state law to demolish their empty residential motel without approval from the city Rent Control Board.

The case is a major test of the Ellis Act, a state law passed last year. It prohibits local governments from interfering with landlords who want to go out of business.

The plaintiffs, Fariborz, Faramarz and Moussa Javidzad, are the first landlords to try to demolish a building under the act without approval of the Rent Control Board. The long-term lessees of the Tour Inn Motel at 1719 Wilshire Blvd. want to raze the 19-unit complex and pave the property for a used car lot, according to their attorney, Gordon P. Gitlen.

Gitlen said Judge David M. Rothman indicated last week that “his tentative belief was what we’re doing is fair.”

City Argues Position

The city, however, argues that the Ellis Act gives landlords the right to have empty buildings, but not the right to demolish them or change their use, said staff attorney Hadassa Gilbert.

“If they are willing to allow the buildings to stand empty, that’s one thing,” Gilbert said. “It’s another thing to allow them to evict their tenants and change the use of the (property).”

Gitlen said this case is the second round in the fight to determine the scope of the Ellis Act.

The first round was won by the landlords when the state Supreme Court denied Santa Monica’s attempts to prevent Henry and Regina Yarmack, owners of the Tour Inn Motel, from evicting tenants so they could go out of business. The city is still trying to overturn the ruling.

Effect of Suit

The Javidzad case will determine whether the rent board has power over rental buildings that have been taken off the market.

“If we’re no longer controlled rental property, then the Rent Control Board has no jurisdiction over us at all,” Gitlen said.

But Gilbert argued that “empty is not equivalent to decontrolled.”

The city, in most cases, requires landlords who want to demolish their buildings to replace or pay for replacing the number of rental units that would be lost, she said.

If the Javidzad suit is successful, other landlords might try to demolish or change the use of their buildings without replacing the lost units, she added.

Apartment owners are keeping a close eye on the case.

The Apartment Assn. of Greater Los Angeles, the California Housing Council and the California Assn. of Realtors, which was a major force behind passage of the Ellis Act, have submitted a “friend of the court” brief supporting the Javidzads.

The realtors’ association contends that the act, named after state Sen. Jim Ellis (R-San Diego), was meant to override rent board jurisdiction over properties that are off the rental market, said attorney Christopher M. Harding, who is representing the groups.

Harding compared the city’s regulations surrounding demolition and usage of apartment buildings to “a Berlin Wall” designed to keep landlords in the rental business.

If the Javidzads win, Harding said, he agrees that many landlords will take buildings off the market “unless the Rent Control Board becomes reasonable . . . on the rent increase issue.”