Scenario:
A woman who rented an Airbnb guesthouse in Brentwood has not paid rent for over 540 days and refuses to leave. Dr. Sascha Jovanovic, a dentist with a practice in Santa Monica, rented out his accessory dwelling unit (ADU) through Airbnb to Elizabeth Hirschhorn, whose stay ended in March of 2022. Hirschhorn has not paid rent since then, leading to a lengthy legal dispute.
Competing lawsuits have arisen from this situation. Hirschhorn argues that she has the right to stay, and a county judge has ruled in her favor, citing Los Angeles’ rent control law as the reason not to evict her. Because she stayed in the unit for six months, she qualified for L.A.’s recently adopted Just Cause Ordinance. It requires a landlord to have a legal reason to evict her, and if there is no legal reason, the landlord is required to pay for relocation assistance for the tenant. In this case, Hirschhorn demands a $100,000 relocation fee from Jovanovic.
Jovanovic initially rented out the guesthouse on Airbnb, garnering positive reviews, and claims he had no idea this would happen. Hirschhorn’s attorney argues that the unit was never approved for occupancy by the city, and it had unpermitted construction, thus making her rent-free. Jovanovic tried to make repairs, but Hirschhorn refused entry to the ADU.
The situation escalated when Hirschhorn refused to leave even after a previously agreed-upon departure date in April 2022. Extending the lease beyond March 19, the original move-out date, was a major error on Jovanovic’s part; it allowed Airbnb to turn its back on the dispute. The company sent an email to Jovanovic acknowledging that Hirschhorn was staying past the date she booked, and recommended that he contact local law enforcement to remove her from the property. Jovanovic attempted to serve eviction notices but faced hurdles due to code violations in the guesthouse. A Los Angeles City Building & Safety Department investigator found that the unit was not approved for occupancy and had an unpermitted shower, subjecting it to rent control laws.
Jovanovic is now suing Hirschhorn for unpaid rent and an unlawful detainer to evict her, but a judge has supported Hirschhorn’s claim, and the legal battle continues, leaving the property in a state of legal limbo.
Comments:
As a resident of the nearby city of Santa Monica, this is a distressing yet not-surprising story. California, and specifically the city of LA, has disadvantaged landlords since the beginning of the pandemic, extending the rent moratorium on countless occasions, despite lockdowns ending and economic recovery already having been on its way.
In this particular case, it seems that the tenant had a motive to exploit the law and take advantage of her relocation demand. We have all heard stories of people exploiting insurance companies when they charge landlords with claims related to injuries on the premises of their properties.
It should be noted that landlords will learn from this, as will tenants, for the purposes of emulating resident Elizabeth Hirschhorn. Whether it is for the purposes of elevating their own rent burden, or eliminating it in total due to a technicality, a heightened awareness for bad actors is crucial for property owners. The course of action taken to dig into whether or not an ADU has a Certificate of Occupancy and was constructed per regulation takes a matter of minutes. I forwarded this article to many small scale, value-add developers whose investment model’s hinge on ADUs to warn them of this risk.
I found this story fascinating and educational for both renters and landlords in the LA area and across the nation. It gives a snapshot of the times we are living in where the tenant has the potential to act in bad faith and squeeze property owners. Development as a business possesses a myriad of risks associated with deploying capital, timelines and feasibility. Now added to that list, tenant exploitation.
Is the landlord fully in the wrong here, as the judge has decided, or are both parties bad actors and the situation should be rectified?
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