By Jorge Casuso
October 6, 2021 — The Metropolis fired its newest volley in an ongoing authorized battle with Santa Monica’s largest market-rate developer final week charging it turned what was as soon as a 10-unit lease management constructing into trip leases.
In a lawsuit filed September 28, the Metropolis and Hire Management Board allege that since 2018, NMS Properties, Inc. and its associates have been violating State and native legal guidelines at their constructing at 1242 tenth Avenue.
The swimsuit alleges that after shopping for the constructing in 2015 the homeowners “began renovations with the aim of upgrading the models for future market charge leases,” in line with officers from the Metropolis Attorneys workplace.
“The harmful situations created by the in depth development drove many tenants out of the constructing,” officers mentioned, citing allegations made within the lawsuit.
When the final three tenants refused to go away or be bought-out, the homeowners invoked the Ellis Act, a 1986 State regulation that permits landlords to evict tenants to be able to get out of the rental enterprise, the swimsuit alleges.
After finishing renovations — which included trendy kitchen home equipment, in-unit washer and dryers and sensible applied sciences — the models have been marketed on widespread on-line rental websites as absolutely furnished, in line with the lawsuit.
“The plaintiffs are in search of a variety of cures, together with financial and injunctive aid,” Metropolis officers mentioned.
In a press release issued Tuesday, attorneys for the defendant known as the the Metropolis’s lawsuit “baseless and retaliatory” and mentioned the Metropolis has been recognized to “attain out to alleged violators to try decision of disputed issues.”
“The Metropolis’s allegations are unusual certainly,” mentioned Rosario Perry, a longtime Santa Monica actual property lawyer who represents the defendant. “We now have all the time complied with the regulation.
“Naturally, when the Metropolis of Santa Monica writes legal guidelines, they’re all the time complicated, exhausting to grasp, and often contradictory to different legal guidelines on the books,” Perry mentioned.
“The Metropolis has no respect for state legal guidelines, or our Metropolis Constitution (adopted by the voters) or the Structure.”
Perry added that NMS and its associates have entitled or constructed some 6,000 condo models in Santa Monica, 400 of them reasonably priced.
The battle between the Metropolis and the defendant flared in December 2016 following a decide’s ruling in opposition to NMS that included allegations of forgery and perjury in a civil dispute with one other developer that was unrelated to any of the corporate’s properties in Santa Monica.
Former Council member Kevin McKeown positioned an merchandise on the agenda calling for a evaluation of the developer’s numerous properties for “doable misstatements and their penalties” (“Courtroom Dispute Between Builders Spills into Santa Monica Metropolis Council Chambers,” December 2, 2016).
“Whereas we now have no specific indication presently that any of the Metropolis’s agreements and contracts with NMS include false info, it is solely prudent for us now to evaluation all these paperwork,” McKeown advised The Lookout on the time.
The battle escalated in 2019, when WS Communities, one of many developer’s associates, threatened to sue the Metropolis over its coverage barring single-room occupancy models.
Underneath a settlement settlement permitted by the Metropolis Council, six market-rate SRO developments Downtown totaling 361 “micro-units” obtained the go-ahead.
The settlement launched the Metropolis of all claims by the developer and set tips for the models (“Market Charge SROs Get Go-ahead Underneath Settlement Settlement,” July 1, 2019).
In December 2020, NMS and WS Communities filed a lawsuit in federal court docket difficult the Metropolis’s new restrictions on residential leases, which required them to be not less than one yr (“Residence Homeowners Sue Metropolis Over Leasing Necessities,” December 16, 2020).
Lower than two months later, a authorized skirmish broke out when the Metropolis sued WS and one in every of its associates for allegedly elevating a tenant’s lease throughout a State of emergency by greater than the allowed 10 p.c (“Metropolis Expenses Main Landlord with Illegally Elevating Tenant’s Hire Throughout Wildfire Emergency,” February 8, 2021).
An lawyer for the developer additionally known as that lawsuit “baseless and retaliatory.”