The City of Santa Monica and the Rental Control Agency are suing NMS Properties Corporation for violations of the Ellis Act and unfair business practices
October 5, 2021 1:33 PM
SANTA MONICA, Calif .– In a lawsuit filed on September 28, 2021, the Santa Monica Rent Control Board and the City of Santa Monica allege that NMS Properties, Inc. and its affiliates have been and continue to violate the state Ellis Act since 2018 local rental control regulations, as well as laws to protect long-term tenants and maintain the city’s affordable housing stock. The lawsuit alleges that the owners and administrators of the 1242 10th Street rental, including WMNS Communities, LLC and NMS Properties, Inc, are stable, long-term renters in a building that is now being used for illegal vacation rentals and other illegal rental activities.
The lawsuit alleges that the defendant owners purchased the properties at 1238 and 1242 10th Streets in 2015 and began renovations to upgrade the units with modern kitchen appliances, in-unit washers / dryers, smart technologies, and more for future market rents . The lawsuit alleges that the dangerous conditions created by the extensive construction work have driven many tenants from the building. The complaint further alleges that when the last three tenants on 1242 10th Street refused to move out or be bought out, the owners resorted to the Ellis Act to remove them from their rent-controlled units, but the apartment rental business did not as required. The Ellis Act is a federal act that allows property owners to evict a building’s tenants who are otherwise justified by eviction rules if the owners intend to leave the rental business.
“The purpose of the Ellis Act is to enable landlords who intend to get out of the rental business to evict tenants who would otherwise have a right to stay in their homes. It is not intended to bypass the rental price brake by evicting long-term tenants in order to obtain higher rental prices in line with the market, ”said Alison Regan, general counsel of the Santa Monica Rent Control Board.
The complaint alleges that after relying on the Ellis Act, the owners placed ads on sites such as apartments.com, westsiderentals.com and mysuite.com promoting the units as fully furnished and available for rent. According to an investigator from the Rental Control Committee who visited the property in December 2018, a month after the units were deemed withdrawn from the rental market, the units had “recently been refurbished and made available for occupancy.”
The board of directors and the city claim that the owners and managers committed additional illegal acts to hide the unauthorized and unauthorized rental activities, including lying by the city staff, submitting false and misleading claims to the city, and using the units to organize unauthorized and illegal short-time work. Permanent tenant activity. The city has also alleged, on behalf of the people of California, that the defendants committed unlawful, fraudulent, and fraudulent acts and practices that violate unfair competition law. Plaintiffs are seeking a wide range of remedies, including monetary and injunctive relief.
The City of Santa Monica et al. v. 1238 10th Street, LLC et al., Case No. 21 SMCV01585, filed in the Superior Court of Los Angeles County, West District, and assigned to Judge H. Jay Ford III.
To contact the Rent Control Board, go to smgov.net/rentcontrol, email [email protected], or call 310-458-8751.
To contact the Public Prosecutor’s Office, Public Rights Division, call (310) 458-8336, email [email protected], or visit SMconsumer.org.
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