TACKLING THE SLUMLORDS : Strong Prosecution Nets Gains as Some Owners Get Jail Time

On Monday, when Municipal Judge David Doi sentences Vijaynand Sharma on criminal charges stemming from slum conditions in five buildings he owns, one of the documents before him will be a Los Angeles County probation officer’s report on the 40-year-old landlord.

Sharma, a real estate investor, owns 18 buildings in the City of Los Angeles. Most contain units where rents are low--under $400 a month--but where local inspectors say rats and vermin live unchecked, broken windows go unfixed and fire equipment, plumbing and electrical parts are inoperable.

“His zealous quest for great financial gain overshadowed and supplanted all regard for the health and safety of others,” says the report, which listed Sharma’s income as $90,000 a month. “Defendant hedged on complying with the minimum responsibilities lawfully required of property owners. This behavior can best be characterized as major fraud.”

Sharma’s recent conviction on 112 counts ended the largest trial, in terms of charges, ever held on slum conditions in city history. A few weeks later, another of his buildings burned in an arson fire, leaving 168 people homeless.

The probation report refers to his history of property ownership--elsewhere in California, in Arizona and Nevada--noting “very disconcerting information with respect to property-related fires and mismanagement.”

“The present offenses serve as excellent illustrations of defendant’s ongoing pattern of blatant disregard for the laws . . . . The recent fire . . . seems to indicate that history is repeating itself,” the report says.

Sharma is, however, only the latest in a string of slumlords, according to officials, who have bought old buildings in the downtown, Central City or Hollywood areas; failed to make repairs; pocketed the rent money, and plunged the buildings into further decline.

“There are several who are among the worst,” City Atty. James K. Hahn said of such landlords.

“And he’s at the top,” Hahn added of Sharma.

In recent years the most well-known have included:

- Milton Avol, a Beverly Hills neurosurgeon who had to serve a 30-day sentence in one of his own slum units this year.

- Former San Diego City Councilman Michael Schaefer, whose former tenants won a $1.83-million award for slum conditions last year.

- Nathaniel Wells, a longtime South-Central Los Angeles landlord who was released from jail this fall. He served a little more than half of a four-year sentence--the record locally--for slum conditions in his buildings.

Perhaps 2% of the 670,000 apartment units in Los Angeles are in the slum category, but officials, such as Barbara Zeidman, director of rent stabilization at the city’s Community Development Department, believe enforcement of laws to keep this housing habitable is “critical for their preservation.”

“They’re terribly important, because of their rent levels,” she said. “They’re the buildings that house our low-income families. If we can’t keep that housing, these people cannot compete for higher rents and will move to garages or the streets.”

Enforcement of housing standards is also important because “the human damage is far greater than in an ordinary dilapidated place,” said Gary Blasi, an attorney for the Legal Aid Foundation of Los Angeles.

“The medical and human consequences are greater,” he said.

Slum landlords tend to be a continually changing group, who are often difficult to trace through corporate entities and myriad deed transfers, according to Stephanie Sautner, supervisor of the city attorney’s Slum Housing Task Force, which has prosecuted more than 500 landlords since its inception in 1980.

Often by the time they reach the end of the paper trail, she added, the building will have been sold again, “and we have to start all over.”

In the last two years, however, the agency’s task force--made up of three deputy city attorneys and teams of inspectors from the Los Angeles County Health Services Department, Los Angeles Fire Department and the city Building and Safety Department--has been able to force enough repairs to bring about 3,000 units back into compliance with local laws.

Sharma and other landlords prosecuted by the city attorney say they have become unfair targets when, in fact, they are burdened by large mortgage payments and utility bills, massive repair bills and destructive tenants.

“I guess they made me look like a king robbing the poor,” Sharma said of his city prosecutors.

Fiji Islands

But Sharma believes that he was doing a service for his tenants. An immigrant from the Fiji Islands, he noted his tenants tend to be immigrants too.

“Poor people, they have to have a place to live,” he said. “I happen to love people.”

There has been such increased pressure on slum landlords in recent years that 73-year-old tenant activist Dino Hirsch, who began volunteering time to help Latino tenants seven years ago, now believes: “The landlord in the business of slumlording is slowly, but surely, being put out of business.”

The pressure comes from several directions, including increased fines and jail sentences; faster prosecutions through criminal case filings, rather than civil lawsuits; a trend toward damage suits filed by tenants for slum conditions; City Council actions against landlords who fail to pay utility bills, and moves to prevent slumlords from benefiting from the sale of their properties before necessary repairs are made.

In the last three years, the number of landlords sentenced to jail due to complaints filed by the city attorney’s task force has tripled from 12 to 36, Sautner said. Fines are higher, in part due to a 1985 amendment to the Los Angeles Municipal Code that doubled misdemeanor fines to $1,000.

“We usually file more than 20 counts in each case we bring,” Sautner added.

“Public opinion (today) has centered much more against the slumlord than seven years ago, which, in turn, is reflected in court,” Hirsch said. “The first time I was in court was as a witness (in a case) brought by the city attorney against a building, a terrible building.

“The judge decided on a suspended sentence and a $300 fine against the landlord. I was flabbergasted to see the suffering of the people reflected in a $300 fine. You don’t see that anymore.”

In contrast, Avol, who has already served a 30-day sentence in County Jail this year, in addition to a 30-day sentence in his building at 1660 N. Western Ave., has to appear Thursday to begin serving another sentence: nine months.

On Monday, Sharma faces a potential maximum of 56 years in jail, along with up to $200,000 in fines.

“Hefty jail sentences are the best deterrent,” Hahn said. “In the old situation, a fine was the cost of doing business. But jail time can hardly be considered a cost of doing business.”

Avol, in fact, has sold four of the five properties for which he was prosecuted, and the fifth is on the market.

Learned Lesson

“He would very much like to divest himself of these types of holdings,” said the neurosurgeon’s attorney, Donald H. Steier. “I think he learned a lesson. These aren’t the type of buildings he’s capable of managing successfully.”

Like Avol, Sharma is in the process of selling his properties. He said he would like to be “out of California,” and added, “My main reason (is) I don’t want to face jail time. I would just like to be free.”

City officials believe that the willingness of people like Avol and Sharma to give up landlording in Los Angeles may stem in part from the prosecutorial shift in the city attorney’s office toward criminal complaint filings, rather than civil cases.

In past years, the city attorney filed civil suits against landlords. Such actions generally progress through the court system more slowly than criminal complaints.

For example, a $1-million civil suit filed in 1984 against Los Angeles attorney and businessman Lance Jay Robbins for allegedly poor conditions in nine of his buildings is not scheduled for trial until August, 1988.

In comparison, criminal complaints filed in early spring against Sharma went to trial in October.

Damage Suits

In addition to city prosecutions, public-interest attorneys have filed damage suits on behalf of tenants. About 10 complaints have been filed since 1981, most through the Legal Aid Foundation, the Inner City Law Center and some private attorneys.

In addition to the $1.83-million award to Schaefer’s tenants, a $610,000 settlement was made last January to 47 tenants in a Vermont Avenue property owned by Surya Gupta, a self-described investor in scientific enterprises. He was accused by tenants--who went on a rent strike over poor conditions--of shutting off utilities, discontinuing trash collection and renting to gang members to scare them out.

Other damage suits are pending against Robbins and Avol.

“We’ve become real sophisticated in presenting these cases to juries,” Legal Aid’s Barbara Blanco said. “We have doctors and psychologists as expert witnesses who describe in graphic terms the danger of living in apartments infested with roaches and rodents, the lack of heat, dampness, mold and mildew.”

Earlier this year, the Los Angeles City Council moved to punish the landlords who have unpaid electric and water bills on master-metered buildings. In the past, failure to pay these bills resulted in shut-off of utility services, hurting tenants more than their landlords, said Department of Water and Power customer services director Jim Derry.

Added to Tax Bills

The council actions provided that unpaid utility charges could be put on the owner’s tax bills and also made failure to pay for services a misdemeanor that can be prosecuted by the city attorney.

According to Sharma’s probation report, his outstanding DWP bill is $197,607.

Increasing efforts also are being made to control sales of slum properties before repairs are done.

When the city attorney settled a case in 1985 with Gupta over conditions at three properties, a provision of the more than $200,000 judgment stated that the court and the city attorney must have prior approval of any potential buyers.

“We wanted to prevent one slumlord from trying to mitigate a sentence by saying they sold the building, when they, in fact, dumped it on another slumlord,” Sautner said.

In August, when Avol sold a two-building complex on Main Street to new buyers, Legal Aid attorneys obtained a court order requiring that the sale proceeds be placed in an escrow account and used for repairs.

“Avol couldn’t evade his responsibility by selling the building,” Legal Aid attorney Michael Bodaken said.

Overseeing Repairs

About $200,000 paid by the buyers to Avol is in that account, the lawyer added, along with $15,000-a-month payments Avol otherwise would receive. A court-ordered receiver is overseeing repairs at the building, estimated at $850,000.

The city attorney’s task force has an ongoing caseload of 100 buildings under investigation. Its inspection teams meet weekly with deputy city attorneys, reviewing current cases and considering new ones. For a building to qualify, which paves the way for prosecuting the owner, Sautner said, all the health, fire, and building inspectors must agree on the severity of its condition.

Sautner--a former New York police detective, who left the department to enter law school, and joined the city attorney’s office in 1984--said only about 25% of the landlords whose buildings make the task force list refuse to cooperate and make repairs.

“In the majority of the cases, we can enforce the codes, “ Sautner said. “They may not get the message initially, but once we file a criminal case, the majority of the landlords try to comply.”

However, Sautner said there are some landlords she calls “the biggest problems we’ve had; the ones we’ve prosecuted the most.”

They include:

- Robbins: The task force filed criminal charges in 1986 for conditions in three buildings. This fall, he entered a no-contest plea, was fined $10,200 and was sentenced to three concurrent 30-day sentences. Robbins, a 40-year-old Los Angeles native, filed a notice of appeal.

A civil suit is pending, but Robbins no longer owns the nine buildings involved. New owners have brought eight of the buildings into compliance with Health and Safety codes, but one remains on the task force list.

- Rosemary Martin: A former UCLA student who began buying Central City properties while in her 20s, she was at age 33 convicted in a 1983 jury trial for violations in four buildings. She was sentenced to 305 days in jail.

Martin, who claimed that she was being persecuted and would picket the city attorney’s office, filed an appeal. When it was denied in 1986, she became a fugitive rather than serve her sentence. She is still at large.

- Schaefer: The former San Diego councilman, who has unsuccessfully run for a number of other political posts--most recently a U.S. Senate seat in Maryland-- spent six days in Los Angeles County Jail after failing to make repairs on a building at 1621 S. Grand Ave.

Civil penalties of $64,000 were levied against him in 1985 as the result of a suit brought by the city over conditions in three buildings, including the one on South Grand. Schaefer lost an appeal.

He filed bankruptcy in July, 1987, and has not paid the penalties. Two buildings were brought into compliance, but the one on South Grand remains a problem.

Last month the task force filed new charges against its current owners, a partnership headed by Bradley Thrasher and Robert T. May.

- Neil Bleuler: During 1986, the city attorney’s office filed four separate cases against this landlord, who prosecutors believe came from San Francisco and bought more than two dozen properties within the last two years. In June, he was found guilty, fined $12,000 and sentenced to 30 days in jail. He filed a notice of appeal.

Bleuler has also been ordered by the court to repair his properties or sell them. In recent court appearances, he said the properties have been sold.

- Joe Fitzpatrick: Task force members preparing the case against him over conditions in three buildings had to research a series of deed transfers, searching for the true owner. The president of one corporation linked to Fitzpatrick was listed as Toulouse Black. Task force attorneys were at a loss to find such a person, Deputy City Atty. Abraham Khan said, until “we found out Fitzpatrick owned a dog by the name of Toulouse Black.”

Fitzpatrick settled his case and agreed to pay a fine of about $20,000, according to Khan.

Some of the landlords or their attorneys who agreed to comment say owners are “political targets,” an easy way to get media attention, and are unfairly prosecuted under a doctrine of strict liability. Thus, under current law, if violations exist, they are guilty--whether or not they caused or intended them or even if they had been trying to make repairs.

Sharma, for example, maintains that he spent $30,000 a month on repairs but was not allowed to introduce that into evidence during his trial.

Attorney Mitchell Egers, who represented Fitzpatrick, said his client had spent $60,000 in repairs on one property alone.

Sharma also believes that the city should have given him more time to make repairs before moving to prosecute him.

Speaking of Fitzpatrick, Egers agreed, adding: “Decisions to prosecute are sometimes arbitrarily made. . . . Let’s say the owner is spending money. Now it becomes a decision as to whether or not the money is being spent fast enough.”

Under the Municipal Code, work to correct violations must begin within 30 days after notice is given and be completed within 90 days.

Tom Pope, a Building and Safety Department inspector on the task force, said inspectors will give an owner more time “if he’s trying--if we go there and see dust flying, a contractor there and workers busy.”

Some say those who crack down on the landlords fail to recognize that tenants can contribute to bad conditions.

“The landlord should be cited, but the tenant should be cited too,” said Dan Faller, president of the Apartment Owners Assn. “They’re both guilty.

“If you go after the landlord only, and he makes repairs, three months later things are back the same, because they haven’t prosecuted the tenants. As long as they go after only the landlord, they are not solving the problem.”

Others say that despite the increasing efforts against slumlords, they are frustrated that more has not been accomplished. All too often, noted Legal Aid attorney Deborah Dentler, “the criminal cases don’t really address the needs of the tenants, don’t usually result in changes in conditions.”

But the search for more ways to eliminate slumlording continues. This fall, for example, Legal Aid filed a novel federal suit, the first of its kind, against Wells--the landlord who just served the record four-year sentence--under the Racketeering Interference and Corrupt Organizations Act.

“We’re alleging that being a slumlord constitutes a racketeering enterprise,” Legal Aid attorney Paul Lee said. “Being a slumlord--not making repairs, evicting people improperly, a pattern of having rundown buildings--is a racketeering enterprise.”

Trial is set for March, 1988.

The city’s Department of Building and Safety, meanwhile, has just overhauled its inspection system. According to Mel Bliss, chief of the community safety division, a new strike force of 10 inspectors, augmenting those who currently inspect apartment houses, will focus on buildings “that are starting to deteriorate.”

“I want to bring buildings up before they get into terrible condition,” he said. “I think it’s more efficient to work toward preventing that, than trying to cure it afterwards.”

SOME KEY SUBJECTS OF ENFORCEMENT

Milton Avol

Beverly Hills neurosurgeon

Served two 30-day sentences, one in one of his own slum units, and another in County Jail, and is to begin serving a nine-month sentence this week.

Has sold four of the five properties for which he was prosecuted, and the fifth is on the market.

Michael Schaefer

Former San Diego city councilman

Spent six days in County Jail after failing to make repairs on a building at 1621 S. Grand Ave.

His former tenants won a $1.83-million award for slum conditions last year.

Vijaynand Sharma

Real estate investor

To be sentenced this week on 112 criminal charges for slum conditions in five buildings he owns. He faces up to 56 years in prison and $200,000 in fines.

Owns 18 buildings in Los Angeles.

Nathaniel Wells

South-Central Los Angeles landlord

Released from jail this fall after serving a little more than half of a four-year sentence--the record locally--for slum conditions in his buildings.