Landlord’s Lawsuit to Block RSO is Dismissed

State Superior Court judge Hon. Mary Strobel has dismissed landlord Hank Dayani’s lawsuit to block the city’s registration of rental units. Dayani himself petitioned for the dismissal. Back in 2017 he requested from the court a temporary injunction citing numerous grounds, claiming that the registration program runs afoul of state law and also alleging harm to him and his tenants from the requirement. With a trial set for August 15th and little hope of prevailing, the plaintiff evidently concedes the city’s program is lawful after all.

Plaintiff Hank Dayani has standing in the case, he argues in his complaint, because his family trust owns two fourplexes (149 and 153 South Maple). But Dayani is no mom-and-pop landlord: he is co-owner (with his brother) of Luxor Properties Inc., which owns the adjacent 9225 Charleville as well as 332 South Elm and has interests in other properties as well. (In fact Luxor appears on the city business license for the Maple properties.)

Dayani’s request for a temporary restraining order to enjoin the city from proceeding with rental unit registration was the first civil action filed. (Another one from industry association AAGLA is still pending.) Presumably the suit was dismissed at his request because he could not support his overreaching claims.

Beverly Hills City Attorney Laurence Wiener said as much just days before Dayani brought his claims to the courthouse. “I advised the Council that I would be bringing a regulation regarding the registration process to the City Council for their consideration at the next City Council meeting,” Wiener said. “For your information, the regulation that I will be presenting to the City Council will include the rent certification process, including appeals from the certified rent level….I hope that you will concur that it would be a waste of your client’s funds, as well as public funds and judicial resources, for you to seek a temporary restraining order or any other ex parte relief against the City.”

Two years later at the 11th hour before trial the plaintiff evidently agreed. Below are the claims made in the suit and our responses. (Read his 2017 amended complaint for those claims or scroll down to read our original 2017 post.)

Claims from the Hank Dayani Amended First Complaint

Claim: Beverly Hills registration process does not satisfy requirements under the Petris Act. The allegation is that the rental unit registration process failed to include “legislatively proscribed [sic] protections for landlords.”

False. The city created a program that meets the state requirements. As it happened, those regulations, in development as the plaintiff’s first complaint was filed, were detailed the very morning of the hearing. So the full details of the registration process — including the required appeals provision under Petris — were agendized by the city on September 15th for the next Tuesday’s City Council meeting (September 19th).

It is likely the registration regulations were known to the plaintiff even as his injunction was heard by the court. The regulations were formally adopted on September 19th — before the rental unit registration window closed on September 22nd.

Claim: Beverly Hills compels him to violate his tenants’ right to privacy by collecting from the landlord details about tenancies that were proscribed under the law. Plaintiff cites specifically the city’s request for “detailed information about the nature of any eviction or vacancy” as an example of the city’s overreach.

False. The registration process collects no tenant name, as plaintiff concedes, nor does it collect any other information about his tenants at all. The registration form asks for scant information about the tenant except the start date of the tenancy and which utilities or select housing services are included. In fact, the city does not know the names of tenants unless either the tenant or the landlord appeals the landlord-reported rent amount, or otherwise brings a dispute forward to the city. (That’s why mail to renting households is labeled only ‘occupant.’) Moreover, questions concerning the reason for a vacancy are only applicable if the unit is presently vacant. That may suggest something about the landlord’s business practices, or it may suggest something about the prior tenant, but it is not relevant to any current tenant.

Claim: Beverly Hills uses the registration process to ascertain unlawful information on tenants. Here plaintiff relies on speculation: “Defendant [Beverly Hills] has made clear it intends to request significantly more information from Plaintiff and other landlords.” To that point, he calls the registration process a “backdoor” through which additional tenant information — confidential and private information — is obtained via the landlord in contravention of state law.

This is simply overreach. The city has no interest in identifying tenants individually or in the aggregate. The city has its hands full enough with landlord lawsuits!

Claim: Plaintiff and other landlords will be “irreparably and/or greatly harmed” if actual rent amounts become public information. Specifically plaintiff speculates that disclosing actual rents drives down asking rents if prospective tenants knew what other tenants are paying. Moreover, plaintiff claims that disclosing rents contravenes the Costa Hawkins Rental Housing Act because — here he theorizes — that a depressed asking rent interferes with his right to establish the rent he chooses on a vacant unit.

Both claims are false. There is zero evidence to support the claim that making rents public will harm the plaintiff or any landlord. Any rent control city must make public the certified rent as a very condition of imposing the price control on that rent. That is a requirement of the Petris Act. Santa Monica makes it searchable by address. West Hollywood requires a public records request. Nevertheless it is all public information. On the Costa Hawkins claim, there is no support offered. Common sense suggests that the market dictates how much rent plaintiff can ask, and the market is certainly broader than his one property. Where is the harm?

Claim: “Strict compliance” demanded by the city’ rental unit registration program “strong arms” the Plaintiff. He argues that the $500 per-unit penalty contravenes the Petris Act because it penalizes the landlord for providing information that (plaintiff alleges) he is not lawfully at liberty to provide.

False. There is a kind of circular reasoning here. Plaintiff claims that the registration information demanded of him by the city is not lawful for him to provide because it is “beyond the statutorily permissible scope” of state law. So he then goes on to say that sanctioning the plaintiff for not providing that information, which he says he can’t lawfully provide, violates the Petris Act.

About the Registry

In January of 2017 City Council required Beverly Hills rental property owners to register with the city each rental unit subject to rent stabilization and some aspects of each tenancy (start date, reason for vacancy, and the rent amount). Registration is critical because that allows the city to enforce the ordinance. Landlords have objected to registration on various grounds: burdensome bureaucracy, cost to comply, disclosure of confidential information, invasion of tenant privacy, and even unconstitutional search and seizure. The Dayani suit was one of two that appear intent to hobble rent control in Beverly Hills.