Judge Rejects All Claims in Tenant Protection Ordinance Lawsuit

The Los Angeles Superior Court ruled in favor of the City of Culver City in a case relating to a lawsuit challenging the use of its Tenant Protection Ordinance. On Tuesday, the court agreed with the City's legal objection to the lawsuit filed by the Fox Hills Canterbury Co., finding the plaintiff did not provide sufficient legal grounds for the lawsuit.

Background

Fox Hills Canterbury Co., which owns and manages the Meadows Apartment Complex on Green Valley Circle and Canterbury Drive, filed a lawsuit in February 2024 challenging the Tenant Protection Ordinance (TPO).

The City Council adopted a permanent Rent Control Ordinance (RCO) and a permanent Tenant Protections Ordinance (TPO) at its meeting on September 29, 2020. The permanent ordinances went into effect on October 30, 2020. The TPO provides some protections to residential tenants related to eviction and temporary displacement. Among other protections, Tenants are protected if faced with temporarily uninhabitable conditions, which can happen with projects requiring:

• Substantial rehabilitation, such as replacing or significantly modifying structural, electrical, plumbing or mechanical systems, as well as removing hazardous materials, such as lead-based paint, mold or asbestos;
• Fumigation; or
• The need to meet State or City housing, health, building or safety laws.

If a tenant is faced with uninhabitable conditions, the landlord must provide temporary relocation or comparable living arrangements, or may provide a per diem payment if agreed to by the tenant. Upon completion of the work, tenants may return to their units at the same rent.

If work is anticipated to last more than 30 days, tenants may voluntarily terminate their lease and start negotiating a buyout agreement with their landlord. If work continues beyond 30 days of the projected completion date, tenants may renew their option to voluntarily terminate their tenancy and enter into a buyout agreement. Note that these are just some of the protections available for tenants.

Fox Hills Canterbury claimed it had "vested rights," based on City-issued building permits for a large renovation project, that it argued should exempt them from parts of the Tenant Protections and Rent Control Ordinances. Vested rights refer to rights that are so well-established that they cannot be revoked without due process. It also argued that the tenant protections in these ordinances amounted to a "regulatory taking" or inverse condemnation, meaning that the regulations were so burdensome that they effectively took property without just compensation because they made the renovations effectively more expensive. 

Court's Judgement 

The City opposed the lawsuit, and filed a demurrer disputing each of Fox Hills Canterbury’s claims. On August 27, 2024, the Court sustained the City’s demurrer without leave to amend, which means the lawsuit cannot proceed based on the facts and legal theories it alleged. The Court found that Fox Hills Canterbury has no vested right to be exempt from the TPO. Also, the TPO has no direct impact on the cost of the renovations; it merely imposes a financial obligation for the property owner to assist with relocation of tenants who may be displaced by the work, and to allow them to return to their apartment units when it is completed. Nothing about the TPO interferes in any way with completion of the renovation work or its cost, and no authority supports Fox Hills Canterbury’s theory that the vested rights doctrine shields it from City regulations, the Court stated. The Court also found that the regulatory takings claim was not “ripe” because Fox Hills Canterbury had failed to pursue the RCO’s procedure for landlords to seek rent adjustments before filing the lawsuit.

The City is pleased with this result, which affirms that the RCO and TPO may continue to protect the City’s residential tenants. Visit the Rent Control & Tenant Protections Measures webpage to learn more about the City’s Rent Control and Tenant Protections Ordinances. You can read the decision in full on the City's website.