CITY OF SANTA MONICA RENT CONTROL BOARD MEETING 1685 Main Street THURSDAY May 8, :00 P.M. AGENDA

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1 CITY OF SANTA MONICA RENT CONTROL BOARD MEETING 1685 Main Street THURSDAY May 8, :00 P.M. AGENDA 1. CALL TO ORDER 2. ROLL CALL PLEDGE OF ALLEGIANCE BUDGET STUDY SESSION (Public discussion is permitted) 1) Third Quarter Budget Report Fiscal Year ) Proposed 2003/2004 Operating Budget. 3. APPROVAL OF THE MINUTES: April 10, SPECIAL AGENDA ITEM New Hearings Department location th St., # JURISDICTIONAL ITEMS (Public discussion is permitted) B. Exemptions - Owner Occupancy 1) 1369: 18 Seaview Terrace, Applicants Frautschy/Cole 2) 1371: 1118 Bay St., Applicant Stocker 3) 1376: 2620 Kansas Ave., Applicant Acari 4) 1377: th St., Applicant - Sheikhpout Applicants request exemption of three-unit properties based upon owner occupancy pursuant to section 1801(c)(4). Recommendations: Grant C. Removal 1) 405R-C: th St., Applicant Beit lr Shalom Affordable Housing LLC by R. Perry (Rep.) Owner seeks removal permit alleging units are uninhabitable and it is not economically feasible to rehabilitate. 9. ADMINISTRATIVE ITEM A. Proposed Amendments to Regulation (Lapse of Three-Unit of Less Owner-Occupied Exemptions). B. Report on Implementation of Regulation REQUESTS TO SPEAK - (Requests from members of the public to speak to the Board on any issue in general) 15. ADJOURNMENT Next Regular RCB meeting May 22, :00 p.m., Council Chamber The Council Chamber is wheelchair accessible. If you need any disability-related accommodations, please contact Glenda Jacobs at (310) at least three days prior to the meeting. This document is available in alternate format upon request.

2 SANTA MONICA RENT CONTROL BOARD REGULAR MEETING MINUTES CORRECTED May 8, CALL TO ORDER The Rent Control Board meeting was called to order at 7:03 p.m. by Commissioner Mueller, followed by the pledge of allegiance. 2. ROLL CALL Member Absent Members Present: Alan Toy Betty Mueller Jennifer Kennedy Jeff Sklar Doug Willis Others Present: Mary Ann Yurkonis, Administrator Doris Ganga, General Counsel Marcia Zimmer, Hearings Dept. Mgr. Tracy Condon, Public Information Mgr. Glenda Jacobs, Board Secretary BUDGET STUDY SESSION 1. Third Quarter Budget Report Fiscal Year Administrator Mary Ann Yurkonis presented a summary of the third quarter budget report. The Board commended staff on a job well done. No action was taken. 2. Proposed 2003/2004 Operating Budget Administrator Yurkonis continued and presented an itemized summary of the proposed operating budget. After a discussion and kudos from the Board, Administrator Yurkonis said the proposed budget will be presented to the Board on May 22 nd with a recommendation to set this item for public hearing on June 12, APPROVAL OF THE MINUTES: April 10, Commissioner Willis, seconded by Commissioner Sklar, moved to adopt the minutes of April 10, The motion unanimously passed in a roll call vote. 4. SPECIAL AGENDA ITEMS Hearings Department Supervisor, Marcia Zimmer, announced that the Hearings department had moved to its new location at th Street, #110. She also announced that any correspondence to the Hearings department should continue to be mailed to Rent Control s City Hall office at 1685 Main Street, Room

3 7. JURISDICTIONAL ITEMS B. Exemptions Owner Occupancy 1) 1369: 18 Seaview Terrace, Applicants Frautschy/Cole 2) 1371: 1118 Bay St., Applicant - Stocker 3) 1376: 2620 Kansas Ave., Applicant - Acari Applicants request an exemption of three-unit properties based upon owner occupancy pursuant to section 1801(c)(4). Recommendations: Grant Commissioner Sklar, seconded by Commissioner Willis, moved to grant the exemptions for the cases listed above. The motion passed in a 4-0 roll call vote. 4) 1377: thSt., Applicant - Sheikhpour General Counsel Doris Ganga presented a summary of the staff report. Henry Fata, tenant, and Frydoun Sheikhpour, owner, addressed the Board. Following a discussion, Commissioner Willis, seconded by Commissioner Sklar, moved to grant the exemption based upon owner-occupancy. The motion unanimously passed in a roll call vote. C. Removal 1) 405R-C: th St., Applicant Beit lr Shalom Affordable Housing LLC by R. Perry (Rep.) Owner seeks removal permit alleging units are uninhabitable and it is not economically feasible to rehabilitate. General Counsel Ganga presented a summary of the staff report. After a brief discussion, Commissioner Willis, seconded by Commissioner Kennedy, moved to grant the removal permit on the basis that the property is uninhabitable and is not economically feasible to rehabilitate. The motion unanimously passed in a roll call vote. 9. ADMINISTRATIVE ITEM A. Proposed Amendments to Regulation (Lapse of Three-Unit or Less Owner- Occupied Exemptions). General Counsel Ganga presented a summary of the proposed amendments. Following comments, Commissioner Sklar, seconded by Commissioner Willis, moved to set this matter for public hearing at the next Board meeting on May 22, The motion unanimously passed in a roll call vote. B. Report on Implementation of Regulation Hearings Supervisor Marcia Zimmer updated the Board on the current events of the implementation of regulation REQUESTS TO SPEAK The following person addressed the Board on various issues: Jacqueline Siegel Bartelt. 15. ADJOURNMENT 2

4 At 8:40 p.m., Commissioner Sklar, seconded by Commissioner Willis, moved to adjourn the meeting. The motion unanimously passed in a voice vote. 3

5 SANTA MONICA RENT CONTROL BOARD STAFF REPORT ON PROPOSED AMENDMENTS TO CHAPTER 12 (EXEMPTIONS AND COVERAGE) TO: FROM: RE: Commissioners Staff Proposed Amendments to Regulation (Lapse of Three-Unit or Less Owner-Occupied Exemptions) FOR BOARD MEETING OF: May 8, 2003 Introduction Chapter 12 provides an exemption from the Rent Control Law for certain properties. One such exemption is available for an owner-occupied property of three or fewer units. 1 Once an owner no longer occupies the property, the exemption lapses, and the property thereafter comes under the Rent Control Law Regulation of Chapter 12, entitled Lapse of Three-Unit or Less Owner-Occupied Exemptions, addresses the procedure staff follows when the owner no longer resides on the property. Under current procedures, when evidence is received indicating the owner no longer resides on the property, a Notice of Lapsed Exemption is mailed to the exemption holder and the tenants specifying the facts upon which the initial determination was made, the date upon which the lapse is believed to have occurred, the consequences of such a lapse, and the procedures available to contest the lapse. 2 Within fifteen days of this initial letter, an owner or tenant of the property may file a written response explaining how the initial determination of a lapse is in error. 3 Thereafter, based upon all of the evidence gathered and submitted, staff makes a final determination. If staff concludes that the initial determination of a lapse was in error, a Regulation Regulation 12070(a)(1). Regulation 12070(b).

6 Staff Report on Proposed Amendments To Regulation Page 2 letter so indicating is mailed to the owner and tenants. On the other hand, if staff determines that the exemption has in fact lapsed, a Final Notice is mailed to the owner and tenants notifying them of the lapse and of the date the lapse became effective. 4 Thus, two letters are mailed when staff has evidence that an exemption has lapsed. There are cases where staff receives more conclusive evidence of a lapse, such as a letter from the owner stating that he/she no longer resides at the property, or a new owner files a registration form for the property and/or notifies the Board in writing that he/she is the new owner. In such cases, it is duplicative to send two letters as described above. Instead, the proposed amendments set forth a more streamlined procedure in which only one letter ( Final Notice ) would be sent notifying the owner, the new owner if applicable, and the tenants, of the lapse. Thereafter, just as in situations where the two letters are mailed, the tenants and owners would have fifteen days to respond. In addition, the same appeals procedure would be available to owners and tenants, regardless of the manner in which staff obtained information of the lapse. In this way, the parties right to object to the lapse is preserved, but only one lapse notice need be sent. Proposed amendments to regulation are attached. In essence, as described above, if the owner informs staff that he/she no longer resides at the property, or if a new owner informs staff that they have acquired the property, only one letter, a Final Notice of Lapsed Exemption, shall be sent. This proposed new procedure is embodied in bolded print in regulation 12070(a)(1) and (a)(2), and in (b)(1). Recommendation Staff recommends that the Board set the attached proposed amendments to regulation for public hearing and consideration at its regular meeting on May 22, Staff further recommends that the Board adopt these proposed amendments at that time. 4 Regulation 12070(b).

7 Proposed Amendments to Regulation Lapse of Three-Unit of or Less Owner-Occupied Exemptions (a) Notice of Lapsed Exemption. An owner-occupied three unit or less exemption lapses by operation of law, as set forth in Section 1801 (c) (4), when the owner no longer resides on the property as his/her principal place of residence. The exemption also lapses when the owner no longer owns at least 50% of the property. (1) If an owner notifies the Board, in a writing signed by the owner, that the owner no longer resides on the property as his/her principal place of residence, the exemption will be deemed to have lapsed and a Final Notice will be sent to the owner and tenants notifying them of the lapse, specifying the facts upon which the determination was made, the date the lapse became effective, the consequences of such lapse, and the procedures available to contest the lapse. The Final Notice shall be sent to the property address and any other known address of the owner. (2) If a new owner files a registration form for the property, and/or notifies the Board in a writing signed by the new owner that he/she is the new owner, the exemption will be deemed to have lapsed and a Final Notice will be sent to the former owner, the new owner, and the tenants notifying them of the lapse, specifying the facts upon which the determination was made, the date the lapse became effective, the consequences of such lapse, and the procedures available to contest the lapse. The Final Notice shall be sent to the property address and any other known addresses of the former and new owners. (1) (3) Upon determination by Board staff that sufficient evidence exists to make an initial determination that an exemption has lapsed, by a means other than outlined in subparagraphs 1 and 2 above, a Notice of Lapse will be mailed to the exemption holder at the property address and any other known address and to the tenants, specifying the facts upon which the initial determination was made, the date upon which Proposed Amendments May 8, 2003 Board Meeting 1

8 the lapse is believed to have occurred, the consequences of such a lapse, and the procedures available to contest the lapse. (2) (4) All written or documentary evidence used in the initial determination shall be available to the owner and tenants for inspection and review during normal business hours. (b) Opportunity to Respond. (1) Within fifteen (15) days of the mailing of the Final Notice, pursuant to subparagraphs (a)(1) and (a)(2) above, an owner or tenant of the property may file a written response to the Notice. The owner and tenant may include with the response any and all relevant documents. Staff shall review the response and any attached documentation. If, after reviewing all relevant material submitted, staff determines that the facts upon which the Notice was based were inaccurate, incomplete, or otherwise in error, the exemption will be deemed not to have lapsed, and the owner and tenants will be so notified. A response received more than fifteen days after the mailing of the Notice will not be considered in the absence of good cause. (2) Within fifteen (15) days of the mailing of the Notice of Lapsed Exemption, pursuant to subparagraph (a)(3) above, an owner or tenant of the property may file a written response to the Notice. The owner and tenant may include with the response any and all relevant documents. Staff shall review the response and any attached documentation. If, after reviewing all relevant material submitted, staff determines that the facts upon which the initial Notice of Lapsed Exemption was based were inaccurate, incomplete, or otherwise in error, the exemption will be deemed not to have lapsed, and the owner and tenants will be so notified. (c) Failure to Respond to Notice of Lapsed Exemption. If an owner does not respond within fifteen (15) days of mailing of the Notice of Lapsed Exemption, the exemption will be deemed to have lapsed and a Final Notice will be sent to the owner and tenants notifying them of the lapse and of the date the lapse became effective. A response received more than fifteen days after the mailing of the Proposed Amendments May 8, 2003 Board Meeting 2

9 Notice of Lapsed Exemption will not be considered in the absence of good cause. (d) Referral to Hearing Examiner. If an owner responds within the fifteen day period, but the response fails to resolve the issues of law or fact set forth in the original Notice, the matter shall be referred to a hearing examiner for hearing. Notice of such a hearing will be given by the Hearings Department to the owner and all tenants residing at the property at least ten days prior to the date set for hearing. (1) Upon referral to a hearing examiner on a Lapse of Exemption, staff may conduct an on-site inspection of the property and prepare a written report for submission to the hearing examiner and submission to the case record. (2) The staff report shall contain a report of staff's observations during the on-site exemption and any photographs taken by staff. The staff report shall be included in the case file and shall be available for inspection by the owner and tenants. It shall be considered competent evidence, but the staff member who prepared the report shall be subject to cross-examination at the hearing. Proposed Amendments May 8, 2003 Board Meeting 3