First Tenants Face Eviction Under Terms of State Law
The Tour Inn Motel on Wilshire Boulevard has long been home to a close-knit group of tenants. But all of them are facing eviction despite the fact that they live in Santa Monica, a city with one of the strictest rent control laws in the country.
The motel’s residents are among the first tenants in Santa Monica who will have to move under terms of the Ellis Act, a state law that went into effect July 1. It allows a landlord to evict all the tenants in a building and go out of the rental business.
“Everybody has started to panic. Let’s face it, we are scared,” said John Emanuello, a barrel-chested former professional wrestler and a Tour Inn resident.
30-Day Wait
The owner of the Tour Inn, Henry Yarmark, officially notified the Santa Monica Rent Board in early July of his intent to withdraw the residential motel from the rental market. Landlords must wait 30 days after notifying the Rent Control Board of their intention to go out of business before they can give their tenants a 30-day eviction notice. Yarmark’s tenants will have to move by mid-September.
The city has received notice from owners of 11 buildings containing 68 apartments that they are going to take their buildings off the market under the provisions of the Ellis Act, said Keith Kresge of the Santa Monica Rent Board. Only 33 of the apartments are occupied, he said. There are about 32,000 rental units in Santa Monica.
Many landlords may be waiting to pull their rental units off the market because legal advisers for both tenants and owners agree that the act will probably become the subject of lawsuits and eventually will be interpreted by the courts.
Before the act was passed, a landlord could evict all the tenants in his or her building only if the Rent Control Board found that the building was uninhabitable and beyond repair, according to Howell Tumlin, board administrator.
Withdrawal Allowed
The Ellis Act allows landlords to empty their buildings and withdraw from the residential rental business, Tumlin said. He added, however, “All that the law permits owners to do is to discontinue renting the units and leave the building vacant. Owners are not permitted to change the use of the buildings or demolish structures without the appropriate permits.
“Ellis is the way out of business but not the way out of rent control.”
All but a handful of the apartments going off the market are in buildings on the 1600 block of Ocean Avenue owned by the Rand Corp. and the Tour Inn Motel owned by Yarmark.
Lawyers for Yarmark and Rand Corp. have said that if they do not receive permission to demolish buildings on their properties, they are prepared to go to court to challenge Santa Monica’s authority to prevent an owner from changing the use of his or her property. Yarmark could not be reached for comment.
The Ellis Act grew out of a lawsuit brought by Santa Monica landlord Jerome J. Nash. When the city refused to permit Nash to demolish a six-unit apartment building, he went to court claiming that the city’s rent control law violated his right to go out of business. Nash won in Superior Court but suffered a reverse in the state Supreme Court. In March, 1985, the U.S. Supreme Court refused to hear the case.
This prompted state Sen. Jim Ellis (R-San Diego) to introduce a bill that prevents governments from compelling landlords to stay in the rental business. The bill became law and went into effect July 1.
Karl Manheim, an attorney who represented the city in the Nash case before he left to become a professor at Loyola University Law School in Los Angeles, said legal challenges to the Ellis Act are “inevitable.”
“There is a meaningful chance that a court will hold that the Ellis Act does not permit evictions,” Manheim said. “All the act itself says is that an owner cannot be compelled to offer accommodations for rent. But it does not say a city cannot enforce eviction controls.”
Although tenants may be able to fight Ellis Act evictions in court, any lawsuit challenging the law could take years to resolve. Unless tenants can get a judge to issue a stay of their eviction orders while their case proceeds, they will have to move, Manheim said.
For the residents of the Tour Inn Motel, eviction will be a considerable hardship, Emanuello said, despite a recently approved city law that requires landlords to pay relocation benefits to evicted tenants of $2,000 to $4,000 per unit, depending on the size of the apartment and the circumstances of the residents.
“Most of us have been here up to 16 years,” Emanuello, 46, said. “As time went on we became a very close-knit family. We eat together every Friday and spend Christmas and Thanksgiving together. You never have to worry, the neighbors help each other.
“This is something we are going to lose. We don’t have much, but what we have we are very happy with.”
Out of Work
Emanuello, who lives with his cat and dog in a single apartment, pays $293 a month in rent. He has been unemployed for three months, ever since the grocery store where he worked went out of business.
“We seriously hope to fight (the evictions) and, if we don’t win, at least stay through January and save some money,” he said. “It is so difficult to get a place in Santa Monica.”
Despite Tumlin’s position that the Ellis Act only allows landlords to go out of business, lawyers for both Yarmark and Rand Corp. say their clients intend to put their properties to other uses.
“The person who owns the property does not want to be in the (rental) business and there is no choice for the tenants because of the Ellis Act,” Yarmark attorney Gordon P. Gitlen said.
Gitlen said his client wants to go out of business in part because the Tour Inn Motel is located in an area zoned to allow for commercial businesses. “Inherent in the right to go out of business is the right to use the property any way legally permissible,” he said.
There is a conflict between the city’s rent control law and the Ellis Act which will probably have to be resolved in court, Gitlen said. It could be 10 years before both sides exhaust all legal appeals and there is a final interpretation of Ellis, he said.
Rand attorney Sherman Stacey said there is “little risk” that Rand will be stuck with empty buildings that it cannot demolish. “It is a doubtful regulation that (says) you can make no use of the property but (for) an empty building. The government has to act reasonably.”
‘Bound to Fail’
However, Manheim contends that the law does allow a use for Rand’s buildings, as residential rental units. The city can prevent demolition to preserve the buildings for future rentals, he said.
Any argument by land owners that the Ellis Act gives landlords the right to demolish their buildings “is bound to fail,” Manheim said.
Uncertainty over the Ellis Act is causing many landlords to hold back and not pull their buildings off the rental market, according to James Baker, a leading spokesman for landlords in Santa Monica.
“I don’t see the bulk of the people who intend to withdraw from business proceeding until there has been a serious court test of the excessive relocation fee issue and the city’s apparent intention to deny owners the right to put their property to alternative use,” he said.
In the meantime, tenants in Santa Monica are more likely to face eviction than at any time since the city passed its rent control laws in 1979.
“They’re just throwing us out and the building is going to sit here,” said Wes Weston, an unemployed construction worker living in one of Rand’s buildings.
‘Slight Injustice’
Weston, 40, has lived in his apartment for eight years. “It is a slight injustice,” he said. “I pay $180 a month for a single apartment with a kitchen. But I don’t like the idea of throwing us out and having this place sit here empty.”
Weston’s neighbor, 31-year-old musician Ron Provanzano, agreed with his neighbor. “I can understand where Rand is coming from. . . . But if Santa Monica isn’t ready to allow demolition, these buildings will be hazardous. This place will be a haven for bums and violence, it will run down this part of town.”
But Emanuello said that evictions can be more traumatic for those who are not young and single. In his building there are several families with small children, some senior citizens and an invalid.
“I don’t know what our next move will be,” he said. “The majority of the people here have low incomes. And we are going to all be thrown into the street.”
