Real Estate News: Landlord-Tenant–Returning all rental fees for a clerical error?

Editor’s Note: We are pleased to welcome Ms. Felten as a contributing columnist at Citizen’s Journal.  We will be bringing you the “Real News” with tips and discussion of real estate law. 

By Jennifer Felten

Case: Lyles v. Sangadeo-Patel

The question presented by this case was whether a tenant is entitled to a refund of rental fees when the landlord fails to comply with the registration requirements of a local ordinance. The ordinance in question in this case was the Los Angeles Rent Stabilizaiton Ordinance (“Ordinance”), which allows a tenant to withhold rent if the landlord fails to register the property. Under the Ordinance, all accrued rent withheld must be paid once the landlord completes the required registration.

In this case, the landlord collected rent from the tenant during the tenant’s nine year occupancy without serving the tenant the required statement. As a result, the tenant sought a refund of all rental fees paid to the landlord, claiming the landlord was not entitled to collect any rental fees as a result of the lack of compliance with the registration requirement by the landlord.

The Court of Appeals held the tenant was not entitled to a refund of the rental fees paid to the landlord since the Ordinance does not enforce penalty costs or allow the tenant to forgo paying their rental fees entirely if the landlord does not serve the mandatory statement. Instead, the Ordinance only permits the tenant to withhold payment until the landlord complies with the registration requirements, after which the tenant must pay all accrued rent.

The Court noted that the penalty structure of the Ordinance was put in place to compel landlords to comply with the registration requirements, not to create a windfall for a tenant. If the tenant had prevailed, they would have been allowed to live rent free for almost nine years. The Court observes this outcome would have been patently absurd and was fully unsupported by the Ordinance.

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logopng-noshadowJennifer Felten, Esq., Partner, Hershorin & Henry, LLP, www.hhlawgroup.com, 699 Hampshire Road, Suite 105, Westlake Village, CA 91361, (805) 265-1031, [email protected].  Ms. Felten specializes in representing both individuals and legal entities, providing representation and guidance on a variety of real estate related matters.

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