Santa Monica : Rent Board Loses Case

A judge has thrown out a Santa Monica Rent Board regulation that discriminated against apartment owners who bought their property after rent control went into effect.

The regulation, which banned such purchasers, whose buildings historically have low rents, from seeking rent increases, was challenged by the Apartment Assn. of Greater Los Angeles and the Santa Monica Housing Council.

Retired Municipal Court Judge James F. Nelson, sitting by assignment in Santa Monica Superior Court, issued the summary judgment Friday.

The attorney for the landlords, Chris Harding, said if the judge’s ruling is upheld on appeal, “the rent board will have to begin taking very seriously their constitutional obligation to property owners.”

In arguing for the regulation, an attorney for the rent board said landlords who bought property after rent control were not entitled to higher rents because they had already benefited financially by purchasing their buildings at a lower cost. The rent structure of an apartment building is a key factor in its value.

“We’re trying to avoid granting rent increases to people who purchased property at a deflated price for speculation purposes,” said rent board chief counsel Tony Trendacosta.

Trendacosta said he does not expect the ruling will have major impact because most landlords with lower rents have owned their buildings since before rent control was passed. He said the board will ask the judge to reconsider and explain his decision later this month.