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O2478City Council Meeting: January 13, 2015 Santa Monica, California ORDINANCE NUMBER 2478 (CCS) (City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA AMENDING CHAPTER 4.56 OF THE SANTA MONICA MUNICIPAL CODE TO CLARIFY AND EXTEND PROTECTIONS AGAINST TENANT HARASSMENT WHEREAS, Santa Monica has experienced an increase in reported instances of harassment of tenants during the past year; and WHEREAS, many believe that it is difficult than to prove violations of the current tenant harassment ordinance due to its requirement of "malice," a term that may be confused with stricter standards in other areas of the law; and WHEREAS, Santa Monica has experienced an increase in reported instances of local residential landlords and managers entering tenants' units without legal justification, or to harass tenants, or extending those entries beyond their proper scope to improper locations and reasons; and WHEREAS, tenants have reported increased invasions of their privacy by property owners and managers, in particular through the use of "inspections" not authorized by law; and WHEREAS, the current fixed civil penalty of One Thousand Dollars ($1,000.00) for violations of the tenant harassment ordinance is insufficient to deter violations of that law and provides judges insufficient flexibility to assess proper penalties; and WHEREAS, the civil penalty for violations of the tenant harassment ordinance should be amended to the range of up to Ten Thousand Dollars ($10,000.00); and WHEREAS, senior and disabled tenants are both disproportionately subjected to tenant harassment, and more vulnerable to its ill effects; and WHEREAS, with the rebounding of both the rental and real estate markets, the disparity between rent - controlled and market rate rentals has continued to grow in recent months; and WHEREAS, landlords have greater incentives to induce tenants in rent - controlled units to move out and many are selling their property knowing that an unoccupied unit can command a significantly higher sale price than an occupied one; and WHEREAS, some landlords offer cash buyouts in exchange for tenants vacating rental units; and even buyouts worth tens of thousands of dollars, or more, can be recouped by a landlord retaining ownership and re- renting at market rates or selling the unit; and WHEREAS, many buyout negotiations are not conducted at arms - length, and landlords sometimes employ high - pressure tactics or intimidation to induce tenants to sign the agreements; and 2 WHEREAS, landlords' tactics sometimes result in tenants entering into Buyout Agreements without a full understanding of their rights and in amounts even below minimum relocation benefits which are required to be paid for all no -fault evictions; and WHEREAS, legislation is needed to promote fairness in buyout negotiations and agreements by requiring landlords to provide tenants with a statement of rights and allowing tenants to rescind a Buyout Agreement for up to 30 days after signing the agreement, thus reducing the likelihood of landlords pressuring tenants into signing Buyout Agreements without allowing the tenants sufficient time to seek advice; and WHEREAS, collecting data about Buyout Agreements would help the City compile comprehensive information about the number, location, and terms of such agreements, and thereby assess the true level of tenant displacement in Santa Monica, and collecting data will help promote fairness in buyout negotiations by fostering transparency. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. Section 4.56.010 of the Santa Monica Municipal Code is hereby amended to read as follows: Section 4.56.010 Definitions. (a) Bad Faith. An intent to vex, annoy, harass, provoke or injure another person. This includes, but is not limited to, the intent of a property owner or manager to induce a tenant to vacate a rental housing unit through unlawful conduct. M (b) Buyout Agreement. An agreement where a landlord pays a tenant money or other consideration to vacate a rental housing unit. An agreement to settle a pending unlawful detainer action shall not be a 'Buyout Agreement." (c) Buyout Offer. An offer by a landlord to pay a tenant money or other consideration to vacate a rental housing unit. An offer to settle a pending unlawful detainer action shall not be a 'Buyout Offer." (d) Fraud. Intentional misrepresentation, deceit or concealment of a material fact. (e) Housing Service. Housing services include, but are not limited to, hot and cold water, heat, electricity, gas, refrigeration, elevator service, window shades and screens, storage, kitchen, bath and laundry facilities and privileges, janitor services, refuse removal, furnishings, telephone, parking, effective waterproofing and weather protection, painting, and any other benefit, privilege or facility that has been provided by the landlord to the tenant with use or occupancy of any rental housing unit. Services to a rental housing unit shall include a proportionate part of services provided to common facilities of the building in which the rental housing unit is contained. 0 (f) Landlord. An owner, lessor, sublessor, or any other person entitled to receive rent for the use and occupancy of any rental housing unit, or an agent, representative or successor of any of the foregoing. (g) Rental Housing Agreement. An agreement, oral or written or implied, between a landlord and tenant for use or occupancy of a rental housing unit and for housing services. (h) Rental Housing Unit. A housing unit in the City that constitutes either a controlled rental unit pursuant to City Charter Section 1800 et seq., (including a room in a single - family home, hotel or motel, rooming house or apartment, single - family home, mobile home or mobile home space, trailer or trailer space); or a rental unit pursuant to City Charter Section 2300 et seq. (i) Tenant. A tenant, subtenant, lessee, sublessee or any other person entitled under the terms of a rental housing agreement to the use or occupancy of any rental housing unit. SECTION 2. Section 4.56.020 of the Santa Monica Municipal Code is hereby amended to read as follows: Section 4.56.020 Prohibition. 5 No landlord shall, with respect to property used as a rental housing unit under any rental housing agreement or other tenancy or estate at will, however created, do any of the following in bad faith: (a) Interrupt, terminate or fail to provide housing services required by contract or by State, County or local housing, health or safety laws; (b) Fail to perform repairs and maintenance required by contract or by State, County or local housing, health or safety laws; (c) Fail to exercise due diligence in completing repairs and maintenance once undertaken; (d) Abuse the landlord's right of access into a rental housing unit as that right is specified in California Civil Code Section 1954. This includes entries for "inspections" that are not related to necessary repairs or services; entries excessive in number; entries that improperly target certain tenants or are used to collect evidence against the occupant or otherwise beyond the scope of an otherwise lawful entry; (e) Abuse the tenant with words which are offensive and inherently likely to provoke an immediate violent reaction; (f) Influence or attempt to influence a tenant to vacate a rental housing unit through fraud, intimidation or coercion; (g) Threaten the tenant, by word or gesture, with physical harm; 0 (h) Violate any law which prohibits discrimination based on race, gender, sexual preference, sexual orientation, ethnic background, nationality, religion, age, parenthood, marriage, pregnancy, disability, AIDS or occupancy by a minor child; (i)(1) Take action to terminate any tenancy including service of any notice to quit or other eviction notice or bring any action to recover possession of a rental housing unit based upon facts which the landlord has no reasonable cause to believe to be true or upon a legal theory which is untenable under the facts known to the landlord. No landlord shall be liable under this subsection for bringing an action to recover possession unless and until the tenant has obtained a favorable termination of that action. (2) This subsection shall not apply to any attorney who in good faith initiates legal proceedings against a tenant on behalf of a landlord to recover possession of a rental housing unit; Q) Interfere with a tenant's right to quiet use and enjoyment of a rental housing unit as that right is defined by California law; (k) Refuse to acknowledge receipt of a tenant's lawful rent payment; (1) Interfere with a tenant's right to privacy, including, but not limited to, entering or photographing portions of a rental housing unit that are beyond the scope of a lawful entry or inspection. 7 SECTION 3. Section 4.56.040 of the Santa Monica Municipal Code is hereby amended to read as follows: Section 4.56.040 Enforcement and penalties. (a) Criminal Penalty. Any person who is convicted of violating this Chapter shall be guilty of a misdemeanor and upon conviction shall be punished by a fine of not greater than one thousand dollars or by imprisonment in the County Jail for not more than six months, or by both such fine and imprisonment. (b) Civil Action. Any person, including the City, may enforce the provisions of this Chapter by means of a civil action. The burden of proof in such cases shall be preponderance of the evidence. A violation of this Chapter may be asserted as an affirmative defense in an unlawful detainer action. (c) Injunction. Any person who commits an act, proposes to commit an act, or engages in any pattern and practice which violates Section 4.56.020 may be enjoined therefrom by any court of competent jurisdiction. An action for injunction under this subsection may be brought by any aggrieved person, by the City Attorney, or by any person or entity who will fairly and adequately represent the interest of the protected class. E (d) Penalties and Other Monetary Awards. Any person who violates or aids or incites another person to violate the provisions of this Chapter is liable for each and every such offense for the actual damages suffered by any aggrieved party or for statutory damages in the sum of between One Thousand ($1,000.00) and Ten Thousand Dollars ($10,000.00), whichever is greater, and shall be liable for such attorneys' fees and costs as may be determined by the court in addition thereto. Any violator shall be liable for an additional civil penalty of up to Five Thousand Dollars ($5,000.00) for each offense committed against a person who is disabled or aged sixty -five or over. The court may also award punitive damages to any plaintiff, including the City, in a proper case as defined by Civil Code Section 3294. The burden of proof for purposes of punitive damages shall be clear and convincing evidence. (e) Nonexclusive Remedies and Penalties. The remedies provided in this Chapter are not exclusive, and nothing in this Chapter shall preclude any person from seeking any other remedies, penalties or procedures provided by law SECTION 4. Section 4.56.050 of the Santa Monica Municipal Code is hereby added as follows: Section 4.56.050 Buyout offers and agreements. p (a) Applicability of Section. This section shall apply to every rental housing unit in the City that is a controlled rental unit pursuant to City Charter Section 1800 et seq., (including a room in a single - family home, hotel or motel, rooming house or apartment, single - family home, mobile home or mobile home space, trailer or trailer space). (b) Disclosure Prior To Buyout Offers. Prior to making a Buyout Offer, the landlord shall provide each tenant in that rental unit a written disclosure, on a form developed and authorized by the Rent Board, that shall include the following: (1) A statement that the tenant has a right not to enter into a Buyout Agreement; (2) A statement that the tenant may choose to consult with an attorney before entering into a Buyout Agreement; (3) A statement that the tenant may rescind the Buyout Agreement for up to 30 days after it is fully executed; (4) A statement that the tenant may visit the Rent Board for information about other Buyout Agreements in the tenant's neighborhood and other relevant information; (5) Any other information required by the Rent Board consistent with the purposes and provisions of this Section; and IN (6) A space for each tenant to sign and write the date the landlord provided the tenant with the disclosure. The landlord shall retain a copy of each signed disclosure form for five years, along with a record of the date the landlord provided the disclosure to each tenant. (c) Requirements for Buyout Agreements. Every Buyout Agreement shall: (1) Be in writing. The landlord shall give each tenant a copy of the Buyout Agreement at the time the tenant executes it. (2) Include the following statements in bold letters in at least 14- point type in close proximity to the space reserved for the signature of the tenant(s). (A) "You may cancel this agreement in writing at any time before the 30th day after all parties have signed this agreement." (B) "You have a right not to enter into a Buyout Agreement." (C) "You may choose to consult with an attorney or the Rent Control Board before signing this agreement. The Rent Control Board may have information about other Buyout Agreements in your neighborhood." A Buyout Agreement that does not satisfy all the requirements of this subsection shall not be effective and may be rescinded by the tenant at any time. 11 (d) Rescission of Buyout Agreements. A tenant shall have the right to rescind a Buyout Agreement for up to 30 days after its execution by all parties. In order to rescind a Buyout Agreement, the tenant must hand - deliver, email, or place in the U.S. mail a statement to the landlord indicating that the tenant has rescinded the Buyout Agreement. (e) Filing of Buyout Agreements. The landlord shall file a copy of the Buyout Agreement no sooner than the 31st day after the Buyout Agreement is executed by all parties, and no later than 60 days after the agreement is executed by all parties. Buyout Agreements shall be filed with the Rent Control Board unless the Board opts not to adopt regulations implementing this section, in which case Buyout Agreements shall be filed with the City Clerk. This filing requirement does not apply to Buyout Agreements rescinded under subsection (d). SECTION 5. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 6. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the `V: remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 7. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall become effective 30 days from its adoption. 13 Approved and adopted this 13th day of January, 2015. L/Lk,gm, Kevin McKeown, Mayor State of California ) County of Los Angeles ) ss. City of Santa Monica ) I, Sarah P. Gorman, City Clerk of the City of Santa Monica, do hereby certify that the foregoing Ordinance No. 2478 (CCS) had its introduction on December 16, 2014, and was adopted at the Santa Monica City Council meeting held on January 13, 2015, by the following vote: Ayes: Councilmembers: Davis, Himmelrich, O'Connor, O'Day, Winterer Mayor McKeown, Mayor Pro Tern Vazquez Noes: Councilmembers: None Absent: . Councilmembers: None A summary of Ordinance No. 2478 (CCS) was duly published pursuant to California Government Code Section 40806 . ATTEST: Sarah P. Gorman, City Clerk