Tag Archives: Real Estate Development

Tenants in Single Family Homes in Los Angeles

Steve Lopez from the L.A. Times had recently wrote about a family in Echo Park being displaced as a result of a new development being built on their property. The family who had lived there for 31 years is being “asked” to leave. I quoted “asked” because if they are not out by a certain date, the landlord can start an unlawful detainer, or eviction, against them. The article is “After 31 Years in Echo Park, victims of displacement by gentrification.”

The Los Angeles Rent Stabilization Ordinance, the formal name of Los Angeles’ rent control ordinance, is aimed to protect renters living in rent-controlled apartments. However, the issue with the Echo Park family in the article is that the Los Angeles Housing and Community Investment Department has determined that the family lived in a single family home. Single family homes do not fall within the protections of the Los Angeles Rent Stabilization Ordinance. This means that tenants in a single family home in Los Angeles can lawfully receive a 30 or 60 Day Notice to Quit and they can have their raised at any time (within California law).

The landlord for the property made an offer for the family to move out and provided $12,500 in “relocation.” However, a tenant in a single family home is not entitled to any relocation under the Los Angeles Rent Stabilization Ordinance. Often times developers and landlords offer tenants in single family homes to pay some “relocation” in order to avoid the eviction process; however, they are not required to pay it.

For both landlords and tenants, it is always important to know whether your property in Los Angeles is rent controlled or not. A call to the Los Angeles Housing Department may be able to answer that question quickly.

What is the Ellis Act?

The Ellis Act is a California law that allows landlords to get out of the rental business by taking their rental units off the market. The Ellis Act prohibits local governments from requiring a landlord to continue to rent apartment units, although local governments could enact regulations to control how landlords do so. Generally, the Ellis Act is invoked when a rental property will be sold as individual condominiums (condo conversions) or if the rental property will be destroyed and built into a new development.

It is important to note that a landlord who invokes the Ellis Act to evict tenants must do so genuinely. A landlord would be subject to civil liability, including punitive damages, if he attempts to evict low paying tenants under the Ellis Act and then rerent the property.

The City of Los Angeles provides a framework for landlords and developers to invoke the Ellis Act in order to evict tenants. It is a long process that can take longer than one year to complete. Landlords and developers interested in starting an eviction under the Ellis Act must do so as early as possible.

The process begins by filing a Notice of Intent to Withdraw Units from Rental Housing with the Los Angeles Housing Department. Then, a landlord must file with the County Recorder a document summarizing the non-confidential provisions of the Notice of Intent. Within five days of filing the Notice of Intent, a landlord must serve all tenants the Notice of Pending Withdrawal. 

Tenants are entitled a 120 Day Notice from the date the Notice of Intent was filed with the Los Angeles Housing Department. However, senior citizen tenants (age 62+) and disabled tenants are allowed to remain in a unit under the same terms for up to one year.

This summary provides a very brief introduction to the Ellis Act within the City of Los Angeles as the procedures can sometimes be a little more complicated and time consuming.

The City of Los Angeles Housing Department has a bulletin that provides information regarding Ellis Act evictions that can be found here, Procedures for Withdrawing Occupied Units from the Rental Housing Market.

Please contact Attorney Anthony Marinaccio if you have questions regarding an eviction under the Ellis Act or if you are interested in pursuing such an eviction at (818) 839-5220.

City May Waive Bidding Defect When It Is Inconsequential

In a recent decision, a California court found that a city may waive a bidding irregularity when it is inconsequential to the City’s decision. Here, the City of San Leandro (the “City”) selected the lowest bidder, Oliver DeSilva, Inc., even though one page was missing from its bid package. A copy of Bay Cities Paving & Grading, Inc. v. City of San Leandro can be found here.

On September 24, 2012, the City called for bids to construct the “BART-Downtown Pedestrian Interface Project Along San Leandro Boulevard.” Prospective bidders were required to submit a standard form proposal to the City along with a big deposit to secure the bidder’s proposal in the form of cash, cashier’s or certified check, or a bidder’s bond executed by an authorized surety company. The City required that a bidder’s package be filled out in its entirety.

Oliver DeSilva (“Lowest Bidder”) was the lowest bidder in the amount of $4,846,700. The Plaintiff in this action, Bay Cities Paving & Grading, Inc. (“Plaintiff”) was the second lowest bidder in the amount of $5,359,725. The Lowest Bidder’s bid package was missing one page, the first page of its bidder’s bond; however, it contained the second page of the bid bond that contained the notarized signatures of the surety’s attorney-in-fact and the President of the Lowest Bidder. After the City opened the bid responses, the Lowest Bidder supplied the missing page.

Three days later, the Plaintiff filed a bid protest arguing that the Lowest Bidder’s bid should be rejected because it was unresponsive. The City responded that the missing page was minor and that the City waived the error to select the Lowest Bidder. Additional follow-up found that the missing page in the bid bond did not change any of rights and obligations under the bond.

In response, Plaintiff filed a writ of mandate and a complaint. The trial court denied Plaintiff’s request contesting the City’s award to the Lowest Bidder.

On appeal, the Court found that although a bid bond was required under the bid, as well as State and local law, substantial evidence supports the City’s decision to waive the irregularity of one missing page from the Lowest Bidder’s bid. The second page of the bid bond contained all the relevant information to determine the Lowest Bidder had received a bid bond for its bid. The first page merely would have contained the name of the contractor, the name of the surety, and the date of the submission of the bid.

Under California law, a bid defect cannot be waived if it gives a bidder an unfair competitive advantage. However, the Court found that the City’s waiver did not create an unfair competitive advantage because the waiver was of something inconsequential to the bid. The Court agreed with the City and found that the City did not abuse its discretion in waiving the mistake from the Lowest Bidder.


What is a Mechanics Lien?

A Mechanics Lien is a hold against a property filed by an unpaid contractor, subcontractor, or material supplier. It is recorded with the county recorder’s office. If it goes unpaid, the unpaid contractor, subcontractor, or material supplier can file a foreclosure action to force the sale of the property in order to get paid.

It is important to note that not just the contractor can file a mechanics lien against a property. Any unpaid subcontractor or material supplier who contracts with the contractor may also file a mechanics lien even if the property owner has paid the contractor. There is no requirement that the property owner and the party filing the mechanics lien have a contract with each other.

A mechanics lien can result in the foreclosure of a property, so it is important to address it quickly when it comes to your attention. Further, if you are contractor, subcontactor, or material supplier not being paid on a job, it is important to understand your rights to file a mechanics lien against the property owner.

If you are a contractor, subcontractor, material supplier, homeowner, property owner, or developer needing a construction litigation attorney, please contact Attorney Anthony Marinaccio at (818) 839-5220 to set up a consultation.