Rent Board Loses Appeal on Evictions : Ellis Act: Appellate ruling agrees with lower court that buyers of a building didn’t break the law by evicting tenants.

The state Court of Appeal has upheld a lower court’s ruling that a group of people who purchased a 10-unit building in Santa Monica, then evicted the tenants so they could move in, did not violate the state Ellis Act.

The appellate court last week also upheld a ruling that the Santa Monica Rent Control Board did not have legal standing to sue the owners for unfair business practices even if the owners had violated the state law.

Tony Trendacosta, general counsel of the Santa Monica Rent Control Board, played down the significance of the appellate court ruling but said the board will not appeal the decision further.

“This is not a landmark case,” Trendacosta said. “It simply resolves the fact that (the owners) can live there in whatever relationship they agreed to.”

The case, known as Santa Monica Rent Control Board vs. Irene Bluvshtein, involved the purchase of a 10-unit apartment building by a group of eight people in February, 1988. The group took title to the property at 808 5th St. as tenants in common and formed a general partnership.

Three months later, the new owners evicted the tenants and removed the building as a rental property under the provision of the Ellis Act. The 1986 law allows landlords to legally evict tenants and go out of the rental business but also prohibits landlords from re-entering the rental market within a year of withdrawal and without offering the units back to the evicted tenants.

The new owners then moved into the units. The rent board sued, claiming that the new owners living in the building constituted a landlord-tenant relationship in violation of the Ellis Act. The board also contended that the actions were an unfair business practice in violation of the state Business and Professions Code.

In pretrial proceedings in Superior Court in 1988, the owners’ attorney, Gordon P. Gitlen, argued that payments made by the owners were made for the mortgage and maintenance of the property, not for “use and possession,” as rent payments are usually defined.

He said that the rent board could not sue for unfair business practices because it did not meet any of the definitions of who is eligible to sue under the Unfair Practices Act and that there was thus no legal basis for the board’s suit.

Superior Court Judge Jack M. Newman agreed, dismissing the suit in August, 1988, and the rent board appealed.

“My client feels that the decision by the Court of Appeal is correct (and) my client felt that the decision by the trial court was correct,” Gitlen said this week. “It’s unfortunate that the rent control board forced an expenditure of governmental and private money for ridiculous litigation.”