Due Diligence: How to Research the Landlord [Updated]
Most tenants won’t need to research the landlord because the relationship is simply business: the tenant writes the check and the landlord provides the housing. But sometimes complications arise and it is useful to know the owner of the property. Not the property management company but the beneficial owner who profits from the enterprise. Here we share some tips on how we do our due diligence using city and state records.
This guide shows the steps that we take when we research a multifamily landlord in Beverly Hills. It could be an individual, a partnership, limited liability company or a corporation. What these structures have in common is one or more individuals are taking part of our rent dollar in profit. What differentiates them is how that profit is distributed. The steps we describe below are useful if an ownership structure obscures the beneficial owner(s) and we have to peel the onion to identify them.
Example: Hamid ‘Hank’ Dayani
Local landlord Hank Dayani first came to our attention for filing a filing a Superior Court lawsuit to block the city from requiring the registration of rental units which is the backbone of our rent stabilization program. From the plaintiff’s brief we saw he owned two fourplexes in Beverly Hills on Maple. What else did he own? We did some digging.
Dayani then emerged as the seller of three properties on the northwest corner of Maple & Charleville where a massive luxury apartment building was recently approved for construction. We had the heads-up, though, because we saw from our digging that this one owner controlled three contiguous multifamily parcels and so expected redevelopment sooner or later. Turns out it came sooner.
We encourage every tenant to do the due diligence on our own landlord. Here are the steps we took to learn more about Dayani.
1) Google by name. We searched Dayani and found it associated with two properties at 151 and 153 South Maple Drive.
2) Google by address. Zillow, Trulia and Loopnet and other online real estate listings will show whether a property is for sale (trouble!) or if it was recently sold (double trouble!). Some sites show a transaction history which can indicate whether there has been an inter-generational transfer of the property to heirs. Whenever a property changes hands it is a heads-up for tenants to expect some change. Unfamiliar people may come sniffing around.
3) Visit the tax assessor online. The county’s parcel search gives an overview including number of units, recent sale (if any), the property identifier (AIN number) and the amount of the tax payment. (See this example.) The assessor’s portal helpfully indicates whether the property is a condominium which means it is exempt from rent stabilization.
4) Search city business licenses. Visit the business license database. Choose ‘business address’ in the drop-down menu then enter the street number and street name only (151 Maple for example). The search returns the operator’s name which may be an individual, trust, limited liability company (LLC) or a corporation. This Dayani business license shows ‘Luxor Properties Inc’ as the operator. Sometimes but not always the name on the business license is also the name on the property title.
In the past it was common for an individual or trust to be on the business license. Today it is most likely to be an LLC because professional operators are entering the market and they tend to hold property through one or more shell companies. Sometimes they are nested four deep. Using state records we climb through the layers to find a beneficial owner. (See more below.)
5) Search business licenses for multiple properties under the same licensee. ‘Luxor’ was a licensee for four properties in Beverly Hills. In addition to the two mentioned in the legal brief, the business license database showed the corporation controlling two additional properties: 9225 Charleville (adjacent to the two fourplexes on Maple) plus 332 South Elm. When one owner controls several contiguous properties it is a sign of parcel assemblage. Redevelopment can’t be far in the future. In the case of 149-159 Maple — the two fourplexes and the Charleville property — it was sooner rather than later.
6) Search the CitySmart portal for property information. CitySmart is the city’s property information system. Simply click on the search icon then enter the building number and street name. Find the search result for the property in question and click on the search return marked ‘land’ (rather than ‘occupancy’).
The portal provides valuable information like the range of residential addresses at that parcel and the permit history for the property. (Recent permits are in the ‘current activities’ section at bottom while older permits are in the ‘archive’ section above.) When permit applications are posted they are invaluable for identifying or confirming the identity of the beneficial owner. Often they are the ones who apply for the building permit.
7) Search the property title. Unfortunately it takes a friend in the real estate business to provide access to property titles. We have that access and use it to identify property owners and addresses. Once we have identifying information for a rental property owner we then cross-check the name and address on that property’s title with other titles for rental property in the city. This is how we identify owners that control multiple rental properties in the city.
8) Search the Secretary of State portal for the beneficial owner(s). Individual owners and family trusts will put the identifying information in the business license and title. This was the way it used to be done. Today there is much greater use of limited liability companies that hide the identities of beneficial owners. So we need to peel that onion! We turn to the California Secretary of State online portal to search for documents related to partnerships, LLCs and corporations.
8A) Enter the entity name….
8B) Beneath the search window choose the relevant result….
8C) Click the history button to pop-up the entity information in the sidebar…
8D) We are looking for the periodic ‘statement of information’ filings. Click through to view the statements and be sure to read all of them!
8E) Look for either a ‘manager’ (in the case of a limited liability company, like the example above) or an officer such as CEO, CFO, secretary or director (in the case of a corporation, as in the example below). These are likely to be the beneficial owners.
One more thing: an LLC is usually controlled by one or more managers but it can also be controlled by another LLC or a corporation. If that’s the case we have to peel the onion: using the Secretary of State’s database search each entity until we can identify a beneficial owner who controls the whole enchilada. Recently we searched a small multifamily property in Beverly Hills and found it nested within four layers of holding companies.
9) Search Corporation Wiki to identify related entities. This can be useful for connecting the dots! Some landlords own many properties in individual LLCs, for example, while other landlords may jointly control a large portfolio. Corporation Wiki draws on Secretary of State filings to visually make those connections. Often we can learn what other businesses the property owner may control. In Dayani’s case he looks like a deb collector. Beverly Hills big landlord Marvin Markowitz owns Factor’s Deli. What we learn from Corporation Wiki!
10) Make note of entities that control single-family properties. When we searched Corporation Wiki for Dayani we saw an entity that was a Beverly Hills single-family property: 511 Doheny Road LLC. We confirmed his control of the property through the Secretary of State statement of information (below). This may be a rental property or it may be the home of the Dayani family. Some more internet sleuthing suggested it was the family home — which is good to know if you are a Dayani tenant and the management company won’t return your call.
11) Search Superior Court case records. Visit the Superior Court for Los Angeles County search page to see the litigation history breadcrumb trail. Landlords have services that blacklist litigious tenants, but tenants have no such service to identify litigious landlords. We have to do a manual search. Visit the case search page then:
- Scroll down to ‘Civil, Family Law and Probate cases’ and click on the button ‘search for entities or individuals by party name.’
- Scroll down the advisory pages on fees and click ‘continue.’
- On the login page you can optionally create an account (it costs a small fee to return actual court records) or ‘continue as guest.’
- On the ‘Search for Case Number by Name’ page enter the relevant search terms (first and last name or entity name).
In our experience with the LA Superior Court search page, a positive search will say “The system has found ____ records that match the search criteria” and allow an opportunity to refine the search before the charge kicks in for the relevant court document.
12) File a public records request with the city. Visit the public records webpage to download the form. We file record requests to see the code enforcement record for a property: past violations, corrections ordered, correspondence with the landlord, etc. 
Don’t be intimidated by the public records request form; and don’t worry about any charges. They are minimal and, in any case, we’ve never had to pay a charge for a public record as we only ask to “inspect” those records. In 9-in-10 times city hall simply emails the material without charge.
Amateur sleuthing like this is necessary because the information that tenants need to do our due diligence isn’t plainly available. Not even the property owner entities are posted on the city website anymore. Those were taken down without explanation about two years ago. And the city does not report any negative information related to rental property operation such as code violations or stop-work orders.
The things we find in our sleuthing. Back when the drought measures were in effect we discovered that one landlord owns a horse farm in the north Valley because she had complained to the city about the high rate she was paying because she used too much water. And she’s not the only one we found who owns a horse farm because we let our fingers do the walking….