Tenant’s Challenge: Screening the Landlord

Time and again we hear stories about unprofessional or unscrupulous landlords and their managers. The ones that slow-roll repairs, engage in intimidation and harassment, improperly withhold deposits and more. They are a minority of owners, sure, but the tenants who rent from them share a lament: “I wish I had known before I rented.” How can a prospective tenant screen the future landlord?

The tenant who wants to do the due diligence runs into a problem: the landlord need not disclose any prior tenant complaint or even a substantiated code violation. Individuals who own the property can even hide behind a limited liability company (they are known as ‘beneficial owners’). As one of our tenants committee members said to gathered landlords at a summer 2017 dialogue, “You know everything about us but we know next to nothing about you.”

The landlords like it that way. We hope this explainer helps to pierce the veil and show why it’s necessary for a prospective tenant do just a little sleuthing to make sure she’s not signing a lease with a problem landlord.

The Basic Search

Eyeball the property. In our explainer, Exterior Code Violations: What You Need to Know, we suggest what to look for on the outside. If possible decline to rent in a poorly-maintained property. Dilapidation shows the landlord prizes cash flow above tenant needs.

Take a good look at the apartment interior. We suggest you think like an inspector and bring along a checklist. At least know what you would be getting into. We elaborate on what to look for in our explainer, Looking at a New Apartment?

Knock on doors. Ask neighbors how they like living in the building. Are neighbors quiet? Any problems with repairs? Asking around is really the only way to learn about management practices — especially if there is a manager or management company between you and the beneficial owners. The caveat here is that some tenants will not like to speak up, while those most motivated to speak up may nurse a grievance. Feel it out: can you live under this roof?

Google the property address. A real estate listing may show the building is for sale (beware!) or if it was recently sold (double beware!). You may turn up some good-to-know information and even the name of the beneficial owner if the actual landlord is an limited liability company or LLC. The google search is the basic, common-sense step we would take before leasing an apartment. Additional steps include:

  • Discovering the name of the landlord (if different than the leasing agent);
  • Googling for pertinent court cases and related ownership entities; and,
  • Checking the city’s permit records for past city correspondence and records of violation.

We cover these advanced steps in greater detail in our explainer, Due Diligence on the Landlord, which will also help a tenant pull back the veil on the beneficial owners who hide behind LLCs and their management companies.

A Story About a Bad Landlord

Take for example 152 South Peck. A google search may have warned a tenant from leasing there. A deep-dive due diligence definitely would have. A casual tenant considering leasing at 152 in the future will get the whole story now if she simply googles! Here’s what transpired.

  • Lease was signed in January of 2013 by single mother of two children; the landlord was 152 South Peck LLC.
  • Successive maximum increases: A first increase effective March 2014 for 8.7% followed a year later by a 10% increase effective September 2014 and then another 10% effective September 2016 (rent increased by 31% in just over three years).
  • Unlawful increase: A third 10% increase effective April 2017 was not lawful because 1) it came less than 12 months after the previous increase; and 2) the city had lowered the allowed annual rent increase to 3% the previous July.
  • Retaliatory increase: The tenant informed the landlord that the latest increase was not lawful and two days later she was notified of a 14% increase instead – a clear case of retaliation. The tenant paid this unlawful rent ($1,550) throughout the remainder of her tenancy because she could not afford to lose her apartment with two children in school. The rent had increased by more than 50% since the lease expired.
  • Extermination services denied: The tenant made numerous requests to the landlord for extermination services for her basement unit. They went without response until the County Department of Health inspected and cited the landlord for infestation.
  • Unlawful unit entry: Twice the landlord entered the unit unlawfully, in the first instance documented by a police report that identified the apparent beneficial owner behind 152 South Peck LLC, Ross Vaisburd, as the entrant.
  • Retaliatory eviction: One week after the police report, the tenant received a 60-day no-just-cause eviction notice — again clearly in retaliation for the tenant calling a public agency. The landlord didn’t file the notice with the city as required by law.
  • Unlawful detainer: Two days after those 60 days expired did the landlord file an unlawful detainer to evict the tenant. The tenant agreed to vacate. No relocation fee was paid although one was required by law.
  • Utilities were unlawfully billed: The tenant was billed for what the landlord represented as her share of the building utilities, but in reality there was no separate metering for her unit. She was billed house utilities unlawfully and that debt followed her after she vacated.

The unit entry, the retaliatory increase and eviction, the unpaid fees, and the unlawful utilities billing (fraud) are all in clear violation of state law and local ordinance. From beginning to end, renting from 152 South Peck LLC was a nightmare for this tenant.

How could the landlord and the apparent beneficial owner, Ross Vaisburd, get away with unlawful business practices? Ross Vaisburd, the apparent beneficial owner behind 152 South Peck LLC, lied to her. He said that her rent increases were lawful because her unit — and her unit alone — was exempted from rent stabilization because he remodeled it in 1999. He claimed that in a misrepresentation to the court too.

The only truth that came from was that the basement was indeed remodeled in 1999. And there is more to that story….

Truth Hides in Plain Sight if We Know Where to Look

The reason why we recommend that tenants research their prospective landlords is because a bad landlord leaves a messy trail. It may not take much to turn up past violations of the kind that Ross Vaisburd racked up in Santa Monica. It’s a google search away.

Vaisburd and his partner were fined $22,000 by City of Santa Monica back in 1999 for misusing the state’s Ellis Act to unlawfully evict tenants without relocation fees. The city’s press release noted then that it took the threat of legal action to get Vaisburd and his partner Daniel Smith to pay up. The release added:

This is not the first fine Vaisburd and Smith have paid for violating laws protecting tenants’ rights. In May 2001, they paid the city a fine of $20,000.00 rather than face trial in a tenant harassment lawsuit brought by the City Attorney’s Office. In that case, Vaisburd and Smith were accused of harassing the lowest-rent-paying tenant in another Santa Monica building in an effort to force him out so that they could capitalize on the statewide “vacancy decontrol” law.

In this tenant’s case, the ‘bad landlord’ signs were there too. The city’s permit record shows that Ross Vaisburd and his 152 South Peck LLC racked up city violations for running an unlicensed leasing business; for failing to maintain a safe workplace; for improper windows for basement dwelling units; and even a violation for not maintaining workers insurance. (The landlord was working as his own contractor — often a bad sign.)

There is also correspondence in the online record that shows how resistant was Vaisburd to the city’s code enforcement inspectors. Belligerence is not an overstatement.

However the clearest red flags were right there in the tenant’s basement unit. The studio didn’t look like an ordinary dwelling unit; nor was it like the other units. It was off a basement hallway that lay behind a locked door. The unit’s steel door had a small window (which a dwelling unit door cannot have). There were evident fire code violations
including a fire alarm that was not properly hard-wired and a heater that had visibly detached from the wall.

But some due diligence in the permit file produced the greatest red flag: the unit’s bathroom included a shower that appeared nowhere in the remodeling plan. The plan showed no shower because this was not a space permitted for human habitation.

In fact all of the bad signs were hiding in plain sight online in the city’s records: the prior violations, the correspondence with the city, and the shower that departed from the plan for the project. Also in the online record was a Building & Safety order to remove a prior unpermitted basemenet dwelling unit at this very location.

The record suggests that Ross Vaisburd and 152 South Peck LLC had agreed to remove that unit but subsequently, as part of the remodel, simply converted what was a basement community room back into an unpermitted dwelling unit. And the illegal unit was subsequently rented to tenants for the next almost two decades.

What Does it Take to Hold a Bad Landlord to Account?

A month after the latest tenant to occupy the space had received her eviction notice, she filed a complaint with the city: is my unit illegal? She didn’t need to scour the city’s violations and permits like we did; she simply heard Ross Vaisburd tell his manager that they needed the tenant out because it was an illegal unit.

But instead of following up on that tip with a thorough investigation, the city’s code enforcement officer told the tenant that the unit was properly permitted. Said the officer:

I reviewed all provided plans on file and discovered a 1999 remodel plan matches with current condition of the reported property. There is no unpermitted construction/remodel.

A few days later the tenant replied:

I am kindly requesting that I be provided with supporting documentation that upholds the legality of my Unit whichever that may be. I am particularly looking for the building’s Certificate of Occupancy.

The officer replied immediately without any of the requested documentation, “I’ve already informed you that your unit is permitted and legal…”

The tenant followed up again and again the code enforcement officer affirmed the result of his investigation:

Again, I have a building plan that shows your unit on it. The permit for the plan was received by the city and inspected. Your unit is legal. Request a public records request for your case or speak to your attorney. Thank you very much and best of luck.

It was the “best of luck” bit that really rankled because the tenant was clearly right. It was plainly evident that this was not a dwelling unit. How could it be that after her treatment from this landlord that the city could not properly investigate her claim?

We toured the apartment on the tenant’s last day there and found plenty that appeared to violate city codes: the fire alarm not properly wired; that detached heater (missed by the code inspector?); and the shower that appears on no remodel plan.

So we followed up with the city and provided our own images. We flagged the relevant plans. Finally, six months after the case was closed on the tenant’s complaint, the city ordered 152 South Peck LLC to remove the illegal basement unit. Which it did. Belated victory!

The city also ordered the landlord to pay the relocation fee. Which it did. And the utility billing company cancelled her debt. The tenant is now in the process of clawing-back the unlawful utilities already paid.

How can it take so much effort to simply hold to account an evidently bad landlord to account even when there is a history of violations in Beverly Hills and court judgements beyond?

Yet the bad practices continue at 152 South Peck. We’ve reported 152 South Peck LLC for an organized AirBnB operation that comprised four units at one time. We also informed the city that his short-term leasing business was unlicensed — and that no business tax was paid. We still walk by to make sure that there is nobody living in that basement space. Do you have an experience living at 152 South Peck? Get in touch!

A Final Note

Fighting this landlord consumed a year of this tenant’s life. To the landlord, though, she was just another problem tenant who didn’t shut up about her unlawful rent increases and the insect infestation and his unlawful unit entry. It cost her a home.

Know that our rent stabilization ordinance provides for a 24-hour cooling-off period after a tenant and landlord reach agreement. The tenant has that long before the lease can be signed (BHMC section 4-6-5). In that time the prospective tenant has an opportunity to take a few minutes to let her fingers do the walking on the keyboard. A web search is the very least she should do.