ORANGE : Canyon Hills Tenants Plan to Appeal Suit

Tenants who lost a lawsuit alleging that the Irvine Co. misled them into renting apartments that were really condominiums will probably appeal.

Three tenants of the Irvine Co.’s Canyon Hills complex in Orange filed a class-action suit against the Irvine Co. in January, alleging that it leased apartments without telling tenants that the units were approved as condominiums. Even though all tenants were allowed to live in their units for the full lengths of their leases, they should have been told they were moving into rented condominiums rather than apartments, attorney L. Scott Karlin said.

On Thursday, Superior Court Judge Randell L. Wilkinson signed an order throwing out the tenants’ suit. Wilkinson said that since the Irvine Co. violated none of the leases and since tenants have no right to live in the units after their leases expired, they suffered no damages.

But that wasn’t the argument tenants were making, Karlin said. The law requires landowners to disclose to prospective purchasers and renters important issues that might affect their decisions to buy or rent the property, Karlin said.

The court’s ruling means that a landlord may lie to prospective tenants by withholding important information as long as the landlord obeys the terms in the lease, he said. Wilkinson’s ruling ignored the right of tenants to be told what they are moving into, Karlin said.

The Irvine Co. disagreed and pointed to Wilkinson’s order dismissing the lawsuit after a Sept. 30 hearing.

“It was one of the most frivolous lawsuits presented against the company,” Irvine Co. attorney Peter D. Zeughauser said Monday. The company plans to file a request for reimbursement of its costs fighting the lawsuit, which will amount to more than $200,000, Zeughauser said.

The Irvine Co. has said it never lied to tenants. The company had no plans to sell the condominiums when it signed six-month or one-year leases with tenants, company officials said. Once the company decided to sell the units, future tenants were told that their units would be sold at the end of their leases.

Karlin, who will meet with his clients to decide whether to file an appeal, said he is confident the appeals court will rule in favor of the tenants. If the Superior Court’s ruling is correct, Karlin said, it would mean that a landlord has no obligation to tell prospective tenants, for example, that the apartments they are about to move into will be bulldozed in a few months for a road-widening project.

The bulldozing of the building, or the possible sale of the apartments, seems like something a reasonable person would want to know before moving in, he said.