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Landlords attack Santa Monica’s ban on short term leases in court

| Dec 28, 2020 | Landlord/Tenant Concerns |

The increasing popularity of on-line rental sites has caught the eye of many communities in California that are popular tourist destinations. One of the most popular of such destinations is the city of Santa Monica, and the city is taking measures to guard its housing stock. One such measure was an ordinance outlawing short term rentals. After the ordinance was enacted, no landlord in Santa Monica could rent a dwelling unit for a terms shorter than one year, and no landlord can rent a furnished unit.

In December, a group of 32 landlords used their limited liability company alter egos to sue Santa Monica to have the ordinance declared invalid. The arguments advanced by the plaintiffs are likely to be used in similar situations involving smaller cities, and knowledge of the arguments may help other landlords formulate a similar complaint.

The essence of the complaint

The complaint alleges that the Santa Monica city council took two years to review the issue of short term housing and that the city at first appeared to be opposed to a ban on short-term rentals. After reaching this apparent consensus, according to the complaint, the city council “bowed to political pressure” from a labor union representing hotel workers and enacted the ban on short-term rentals.

The complaint alleges that the city is violating the California Coastal Act that applies certain restrictions to cities in the state that govern land within 1,000 yards of the Pacific Ocean. The complaint also alleges that the ordinance violates the equal protection clause of the 13th Amendment to the U. S. Constitution by discriminating against victims of Covid 19 who may be looking for temporary housing close to hospitals. The complaint also alleges that landlords in the city have suffered unlawful financial harm due to the virus and that the ordinance imposes even more suffering.

This lawsuit will be closely watched by the rental industry and real estate lawyers in Los Angeles and elsewhere. With potential appeals, the case could last for years.