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Rent Stabilization Commission Referees Landlords-Tenants

In the Sept. 9 hearing, the commission adjudicated its second tenant-landlord dispute, a contentious case involving a tenant in a luxury penthouse apartment on Roxbury Drive. In that case, the tenant, a producer, claimed that her income had been substantially impacted by the shutdown of the film and TV industry.

Rent Stabilization Commission Referees Landlords-Tenants
BY Sam Braslow September 10, 2020

For the last three months, the Beverly Hills Rent Stabilization Commission has faced the unprecedented task of adjudicating landlord and tenant disputes stemming from the City’s eviction moratorium. With the pandemic still raging, albeit less uncontrolled, the commission represents the City’s efforts at balancing the lives of tenants with the livelihoods of landlords. And after hearing its second case on Sept. 9, it seems to be working as intended.   

“I think things are going far better than I ever anticipated,” Commission Chair Lou Milkowski told the Courier.

Milkowski sits on the commission as the only member with prior experience. Nonetheless, “With all the newbies, I’m happily surprised how engaging the dialogue has been so far,” he said.

The Rent Stabilization Commission operates with a unique mandate. It not only serves in an advisory capacity, offering the Mayor and City Council advice on possible new legislation or changes to old legislation, but it also has a judicial function. The commission hears disputes between tenants and landlords who fail to come to an agreement in regards to rent deferrals due to COVID-19.

With those dual roles in mind, the Mayor and City Council “put forth a totally unique commission in trying to create balance and fairness to all parties concerned,” Milkowski said. While commissions typically have an odd number of seats to avoid gridlock (think: the Supreme Court’s nine justices), the City Council sought to emphasize consensus and balance by seating an even number of commissioners. “Our commission is comprised of two land, two tenants, and two people at large, of which I am one,” Milkowski, a homeowner, explained. “So we’re neither a landlord nor a tenant.”

“We’re trying to balance the needs of a tenant, who may have drastically reduced income, versus the rights of the landlord, who has his own responsibilities, his own payments that he has to make,” said Milkowski.

The Beverly Hills City Council established an eviction moratorium for tenants impacted by COVID-19 on March 16 in Urgency Ordinance 20-O-2805. The ordinance lays out the process by which tenants can assert a lawful inability to pay some or all of their rent. A tenant must notify their landlord of financial hardship due to the pandemic within 7 days after the date rent is due and provide documentation within 30 days. The tenant then has one year from the end of the emergency to pay the rent back in full.

The landlord can contest three different parts of the tenant’s claim: whether the tenant has suffered financial hardship, whether that hardship stems from COVID-19, and the amount of rent the tenant claims they can pay.

The commission has only heard two tenant-landlord disputes since its first meeting on June 3. To Helen Morales, Deputy Director of Rent Stabilization Division, this speaks to the success of the framework put in place by the City Council to help tenants negotiate rent deferrals due to the economic impacts of COVID-19.

“It is a low number and I think that it is working,” Morales told the Courier. “I think that tenants and landlords are working things out together.”

“Landlords and tenants since Adam and Eve have been working out their disputes one way or another,” Milkoswki added (although, arguably, Adam and Eve experienced the first eviction on record after violating the single provision of their lease agreement). “And now, the city has, in their wisdom, given additional protection and benefits to the parties so that they can work hopefully more amicably.”

In the Sept. 9 hearing, the commission adjudicated its second tenant-landlord dispute, a contentious case involving a tenant in a luxury penthouse apartment on Roxbury Drive. In that case, the tenant, a producer, claimed that her income had been substantially impacted by the shutdown of the film and TV industry. The tenant said that she could only afford to pay $5,200 of her $15,500 rent, but did not provide significant evidence of her income prior to and after the outbreak of the pandemic.

The landlord disagreed with all three parts of the tenant’s claim, writing that “without any evidence of your individual finances, we believe you have failed or refused to demonstrate your inability to pay rent due to substantial financial impacts related to COVID-19.” As such, the landlord rejected the proposed alternative of $5,200 per month.

After a nearly two-hour-long meeting, the commission could not come to a decision. Instead, they voted to continue the case to give the tenant more time to furnish documents to prove her income. The counsel for the landlord repeatedly noted her opposition to this, pointing out that the tenant had postponed the hearing three times since its original date on June 10, giving her ample time to prepare documentation.

“It’s hard to come to a determination without any concrete information on income,” said Commissioner Ryan Gurman, who served as an alternate in place of Commissioner Donna Tryfman.

The commission voted to continue the hearing on Sept. 23.

The largest challenge the new commission has faced, Milkowski told the Courier, is navigating the logistics of remote hearings—poor internet connections, failing webcams, echoing audio.

“I’ve been a prior commissioner and, as all other prior commissions, we met in City Hall. In City Hall, you can, as chairman, control the discussion pretty well,” he said. “Video adds additional challenges, like we have to keep reminding people to go on mute and wait to be recognized.”

These challenges were on full display in the commission’s first tenant-landlord hearing on Aug. 12. In that, the 87-year-old tenant’s internet connection frequently lagged and one commissioner’s webcam stopped working midway through.

The commission took the growing pains in stride, though, and the hearing still reached a conclusion. In a unanimous ruling, the commission sided with the landlord. Even though they agreed that the tenant’s income had been substantially impacted, they did not believe he had provided enough evidence that COVID-19 was responsible.

Commissioner Milkowski sees broader value in the Rent Stabilization Commission even beyond the current moment. “I think there are lessons and there are ideas that the Council and Mayor may want to continue going forward even after our crisis is over,” he said.

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