SANTA MONICA—Santa Monica property landlord, Marble One, LLC, agreed to pay a $120,000 fine to the city of Santa Monica on Monday, October 21 for failure to abide by the terms of a deed restriction protecting a rental housing unit protected by affordable housing.
In the Los Angeles Superior Court Case, City of Santa Monica vs. Marble One, LLC, the City Attorney’s Office alleged that Marble One, LLC rented a deed-restricted unit to an ineligible tenant and collected monthly rent above the amount allowed by law. A deed restricted unit is one that limits how payment to the unit can be used due to the fact that its usage is bound to specific regulations to keep the rental space affordable.
After an investigation and referral from the City’s Housing Division, the Santa Monica City Attorney’s Office expressed their intent to enforce the deed restriction against Marble One, LLC.
Superior Court Judge Elaine Mandel, ruled to assign a stipulated injunction against the defendants. An injunction is a court order requiring an individual to omit from engaging in a court ruled specific action. It is only assigned to cases when courts agree that engaging in the prohibited actions will prevent possible injustice.
As well as assigning a stipulated injunction, Judge Mandel ruled in favor of assigning a judgement. Included in the judgement ruling was Marble One, LLC’s non- negotiable agreement to pay the city of Santa Monica $120,000 in damages and fees. The fine represents approximately double the excess rent alleged to be collected by Marble One, LLC against the affordable housing law.
Judge Mandel ordered the defendants, who denied liability, to hire a city-approved third party to manage the unit. According to court documents, future violations will result in Marble One, LLC, to pay a minimum penalty of $10,000 per violation.
“These two allegations—renting to a tenant who is over-income and then charging more than the rent cap allows—are the two most common types of owner violations in these cases,” said Deputy City Attorney Gary Rhoades. “In nearly all of the City’s income-restricted units, these acts would be violations of both the deed restriction recorded against the property and the City’s Affordable Housing Production Program Ordinance.”
The Santa Monica City Attorney’s Office noted the result of the suit is the first judgment in California brought to enforce terms of deed restricted affordable rental housing.
“This lawsuit and judgment protect the City’s investment in affordable housing,” said City Attorney Lane Dilg. “The City has secured income-restrictions on over 1,000 rental units and we will fight to preserve each and every one for the low-income tenants they were intended to house.”
The fines paid by Marble One, LLC to the city will be utilized towards the Housing Trust Fund to fund future affordable housing.