Late last week, the City Council adopted, and the Mayor signed, amendments (“Amendments”) to the Los Angeles Rent Stabilization Ordinance (RSO) to require landlords to provide additional information in the event of tenant buyouts. Previously, a landlord and tenant could agree for the landlord to pay the tenant a fixed sum for the tenant to voluntarily vacate the unit, but the landlord was under no obligation to inform the tenant of his/her rights. The RSO allows rents to be elevated to market levels if a tenant voluntarily moves out, thus the incentive for landlords to negotiate with tenants. The Amendments require:
- Landlord shall provide tenants with a disclosure of tenant rights on a form authorized by the City
- Landlord shall provide tenant with a buyout agreement in writing
- The buyout agreement may be canceled within 30 days of execution by the landlord and tenant without any obligation or penalty
- The landlord shall file a copy of the buyout agreement to the Department of Housing and Community Investment Development (HCID) within 60 days of execution
- Agreements that do not conform with the Amendments may be cancelled without any obligation or penalty
In addition to the above, the amendments provide a private right of action by tenant against landlord (penalty not to exceed $500) and that tenant may assert a violation of the Amendments as an affirmative defense in an unlawful detainer action.
The Amendments are part of the City’s efforts to curb abuses of the RSO and to provide transparency to tenant buyouts. Because all buyout agreements must be filed with HCID, the City will be able to ascertain whether or not the buyouts comply with the RSO and keep track of rents. Given the high cost of rent in Los Angeles and recent concern about abuses of the RSO, we should expect the City to propose additional regulations in this area.
This article is intended for informational purposes only and is not intended as a substitute for legal counsel. It does not establish, and receipt of it does not constitute, an attorney-client relationship.