By Jason Islas
June 17, 2013 — For the first time since Santa Monica’s Rent Control law passed more than 30 years ago, landlords won’t be able to recoup all of the registration fees they pay to the Rent Board each year.
Facing a half-a-million dollar deficit next year, the Rent Board voted unanimously Thursday to raise the annual registration fee from $156 per unit to $174.96, or $14.58 per month per unit.
The Board also unanimously agreed that landlords can pass through $13 a month of that fee to tenants, leaving the landlords to shoulder about $1.58 a month for every unit they own.
“What we’re trying to do here is to eliminate a deficit,” said Rent Board member Todd Flora. “This amount seems very well thought out.”
Staff claims increasing the fee for the city’s 26,350 billable controlled units would yield $4,610,196, covering the amount it needs to break even.
“With anticipated revenue from interest income and miscellaneous administrative charges, the budget would achieve near-perfect balance,” officials said.
Originally, staff proposed revising the statute to allow landlords to recoup only 50 percent of the registration fees but changed the proposed formula after threats of litigation.
“At its last regular meeting, a public speaker told the Board that landlords would sue if they were required to bear any portion of the registration fee,” staff said.
Some landlord representatives claimed that changing the amount landlords could recoup would violate the City Charter.
Still, staff maintains that the Board has a right to regulate how much of the registration fee landlords can pass on to their tenants.
“That the Board has allowed landlords to recoup 100 percent of paid registration fees does not change the fact that registration fees are landlords’ responsibility to pay,” staff said.
“Nor would reducing the amount or proportion of fees that landlords may recoup from their tenants by means of a pass through constitute the ‘imposition’ of a new fee on landlords.”
Staff argued that landlords have benefited from having a Rent Board that assures fair arbitration in landlord-tenant disputes.
Landlords have argued that the board – which mostly handles rent decrease petitions – disproportionately benefits tenants.
Registration fees account for roughly 85 percent of the Rent Control Agency’s $4.5 million budget and the 12 percent increase in the fees comes more than a month after the Board voted unanimously to limit the amount landlords could raise fees on rent controlled units to one percent or no more than $17.
Source: Santa Monica Lookout