Lakeesha Lyles (“Lyles”) was a tenant living in a rent controlled apartment in Los Angeles since 2003. Her landlord, Denise Sengadeo-Patel (“Patel”), failed to send her a copy of a rental unit registration statement or the annual rental unit renewal statement as required by the rent control ordinances. Due to Patel’s failure Lyles (after paying rent for almost a decade) sued her landlord for all of the rent that she had paid on the theory that the landlord was entitled to collect no rent because of her failure to comply with the rent control ordinance. The trial court found that Lyles failed to state a claim. Although the court gave Lyles the chance to amend her complaint, she instead chose to appeal the decision.
The Second Appellate District affirmed the trial court’s judgment and held in favor of Patel. In Lyles v. Sangadeo-Patel, the appellate court held that although Patel may have violated the rental ordinances, she was still entitled to collect rent. The appellate court agreed that, technically, Patel failed to send the statements as required and therefore was in violation of the rental ordinances. However, the appellate court found that the “idea that the failure of the landlord to serve a copy of a registration statement upon the tenant would lead to a forfeiture of all rent … would be an absurd and unreasonable consequence.” Instead, the court held that the proper remedy for a landlord who failed to send the statements was to allow the tenant to withhold rent until the statements were sent. Once the statements were sent, the tenant would then be responsible for paying all of the withheld rent.
WHY THIS DECISION IS IMPORTANT:
This case is one of several recent cases where there is an appellate decision in favor of the landlord involving a rent control ordinance violation. The court noted that the interpretation of the statute offered by the tenant would lead to an absurd and inequitable result, even though there was a violation of the rent control ordinance. In order to avoid that result, the court went out of its way to provide other, more limited, remedies for the tenant. Given this decision, and another recent decision that was also in favor a landlord, it seems that courts have been limiting the potentially devastating impact of a landlord’s minor violation of rent control ordinances.
One of the arguments raised by the tenant was that previous decisions had noted in dicta that where there was no legal rent, as she believe to be the case here, the maximum rent allowed was $0. Here, the court acknowledged that Lyles made the argument, but essentially ignored it by stating that the statements were purely dicta and therefore were not binding. It will be interesting to see if future cases attempt to decide whether a landlord has any right to rent if they are in violation of rent control ordinances.
As always, give us a call at (650) 327-2900 if you think you have a real estate matter and need legal representation or visit us on the web at www.BrewerFirm.com.