LARSO, SCEP, REAP Landlord Hearings: Los Angeles Rent Stabilization Ordinance

This article will discuss the good, bad and ugly of the Los Angeles Rent Stabilization Ordinance or LARSO, and the Systematic Code Enforcement program known as SCEP that now includes the Rent Escrow Account Program or REAP.

Back in 1998 the tenant advocates convinced the Los Angeles City Counsel to pass rent control. As part of the City’s Rent Stabilization Ordinance the City of Los Angeles developed a routine inspection program of the City’s rental housing by the adoption and enforcement of standards, regulations and procedures to remedy the existence and prevent the development or creation of dangerous, substandard or unsanitary and deficient residential buildings and dwelling units.

The SCEP program effects property owners of dwelling units, efficiency dwelling units, guests’ rooms and suites as defined under the City Municipal Code including duplexes, and apartment complexes. The program’s aim, through systematic inspections, guarantees that those who reside in rental units in Los Angeles have a safe, livable space, which meets requirements set forth in the California Health and Safety Code and the Los Angeles Municipal Code.

What did this program mean to owners of real property covered under the Los Angeles Rent Stabilization Ordinance? Essentially, it required all landlords with property covered under the LARSO to open the doors to their properties to the Housing and Community  Investment Department of Los Angeles known as HCIDLA, who can inspect the property every four years without a warrant and without any complaints for tenants occupying the rental property.

Under SCEP, HCIDLA thoroughly inspects the City’s residential rental properties with two (2) or more units once every four years to ensure compliance with State and local health and safety codes.  Any properties that do not meet the requirements of City and State codes are cited within five days, and the HCIDLA issues the property owner a Notice to Comply that provides 30 days to complete the needed repairs.

HCIDLA conducts a property re-inspection to verify compliance with HCIDLA orders to repair the outstanding violations. The property owner may request a 30-day extension; however, approval is subject to significant progress of work completed when the request is made.

The inspector, who can enter the rental property without a warrant and/or without any complaints from any of the tenants, identifies habitability violations at rental properties and enforces compliance. The goal of the SCEP program is to ensure conformance with State and local health and safety codes, to preserve the City’s rental housing stock, and to protect the health, safety and welfare of their occupants and of the public.  Property owners have the responsibility to make certain that tenants have a safe environment in which to live.

Not only can the City inspector enter the rental property without a warrant, but the property owners must also pay $43.32 annually to fund this program.  A landlord may pass through 100% of the annual SCEP fee per rental unit as a monthly surcharge of $3.61, provided that the landlord has paid the SCEP fee to HCIDLA and given the tenant an advance written thirty-day notice.

What conditions may be considered deficiencies? Deficient conditions include but are not limited to:

• Lack of proper maintenance or the existence of unsanitary conditions in a building or on its premises.
• Deteriorated or defective interior walls, ceilings, floors or floor coverings.
• Deteriorated or defective exterior walls or roof coverings, wood trim, fascia or lack of weatherproofing.
• Broken or missing windows, window screens or foundation vent screens.
• Lack of quick-release mechanisms on security bars over sleeping room windows.
• Defective, missing or improperly installed smoke detectors, carbon monoxide detectors or other life safety items.
• Lack of required light, ventilation, required minimum floor area, or required ceiling height in a habitable room.
• Defective or missing required light fixtures, electrical outlets, switches, etc., or ex-posed/unsafe electrical wiring.
• Deteriorated, leaking, missing or improperly installed plumbing faucets, valves, fixtures or other such items.
• Lack of required hot water, water heater strapping, positive vent connections, combustion air/or properly installed temperature-pressure relief valve, with its drain extended to an approved location.
• Lack of required heat due to missing, defective or improperly installed heating unit.
• Any unapproved use, unapproved occupancy, additions, alterations, or improvements made without permits and approval from the City of Los Angeles Department of Building & Safety.

When will SCEP inspections be conducted?

Inspections will be conducted approximately once every four years unless a complaint is received on a property. All property owners will be given a 15-day notice by phone or in writing before an inspection is to take place.

The inspector comes out to the rental property and identifies some deficiencies in the rental property and issues a report.

The property owner must now comply with the inspection report within a specified period or face very draconian punishment with minimum due process protection.

What happens if SCEP inspection deficiencies are not corrected within a specified time?

If violations are not corrected within a specific time, the property may be subjected to other enforcement actions, including recommendations that the property be placed in the Rent Escrow Account Program (REAP), or that civil or criminal prosecution be initiated.

To enforce habitability requirements in residential rental units’ subject to the Housing Codes of the City, the SCEP now includes the Rent Escrow Account Program (REAP), LAMC 162.00, and Rent Reduction Program (RRP) established by the LARSO.

If the violations have not been corrected, the property is referred to a General Manager’s Hearing and the Department will refer the case for further enforcement activity.

How does the landlord comply?

SCEP Inspectors will issue a written notice for any deficiencies found and the owner will be allowed up to 30 days to correct the issues, depending on the severity of the deficiencies to make the repairs.

If repairs are not made within the specified time, the owner will be summoned to an administrative hearing to determine the reason for non-compliance. Based on the determination, a substandard order may be recorded against the property.

After the hearing, the owner will be required to pay for all subsequent inspections to determine compliance. The owner may file an appeal of the General Manager’s decision 10 days after the decision’s notice is sent.

At this Administrative Hearing the rental property owner who either had failed to make the repairs in a timely manner or failed to make the repairs to the satisfaction of the inspector is presumed to be guilty unless the owner can prove that the repairs have been substantially completed, the tenant refused to allow entry to the rental unit or property, or the property owner requested a reinspection which had not been completed by the City.

The results of this General Manager’s Hearing can be devastating to the landlord. If the Administrative Judge agrees with the City rents will be required to be paid into a City Escrow Account. The rents will not be returned to the landlord until the required repairs have been made.

Whether as a California landlord you agree with the aims of LARSO, the SCEP program or the REAP program that is now a part of it, it is essential that you know and follow the law to avoid expensive mistakes and legal actions that can be very expensive if you have to appear before a landlord hearing on any of these issues and a decision is rendered against you.