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(Added by Ord. No. 173,810, Eff. 4/16/01.)
DEPARTMENT. Refers to the Los Angeles Housing Department (LAHD); Housing and Community Investment Department (HCID); and all other successor entities. (Added by Ord. No. 184,446, Eff. 9/28/16.)
ENFORCEMENT AGENCY. The Department of Health Services of the County of Los Angeles, Los Angeles Department of Building and Safety, Los Angeles Fire Department, Los Angeles Housing Department, California Department of Housing and Community Development, and all their successors, and/or any other governmental agency that inspects rental units for the purpose of compliance with health, safety, or housing laws. (Amended by Ord. No. 187,122, Eff. 8/8/21.)
ORDER. Any order or notice to comply, correct or abate a condition or violation issued by an Enforcement Agency.
RAC. The Rent Adjustment Commission, or its successor.
REAP. The Rent Escrow Account Program provided in this article, including the escrow account and the rent reduction.
(Added by Ord. No. 173,810, Eff. 4/16/01.)
Any City or County agency or any tenant may refer any building or residential unit within the scope of this article to the Department for inclusion in REAP if the following conditions are met:
i. The building or unit is the subject of one or more Orders;
ii. The period allowed by the Order for compliance, including any extensions, has expired without compliance; and
In its referral, the City or County agency shall indicate if the violations are of a nature or extent that they are likely to exist in or affect units that have not been inspected. The RAC shall promulgate regulations setting forth criteria for determining when that condition exists.
(Added by Ord. No. 173,810, Eff. 4/16/01.)
A. Upon receipt of a referral, the Department shall verify that the period allowed for compliance, including any extensions, has expired. If the compliance period has not expired but the conditions set forth in Section 162.03 have otherwise been met, the Department shall hold the referral for processing until after the period expires.
B. Upon receipt of a referral, the Department shall also investigate whether there are other outstanding Orders against the building that also meet the conditions set forth in Section 162.03.
C. After completing its review, the Department shall accept the building or unit into REAP if the conditions set forth in Section 162.03 are met. If there are other Orders that meet the conditions set forth in Section 162.03, the Department shall accept any additional units covered by those Orders into REAP. If the other Orders have not yet expired, the Department may accept the units effective the date the Orders expire. If the referral by a City or County agency indicates that the violations are of a nature or extent that they are likely to exist in or affect all of the units, then any rent reduction for those violations shall apply to all affected units.
D. If the Department accepts the building or unit into REAP, it shall issue a Decision (“Department’s Decision”) setting forth: (Amended by Ord. No. 184,446, Eff. 9/26/16.)
1. The date of the Order that has not been complied with and the citing agency;
2. The outstanding violations;
3. The units affected by the Department’s Decision;
4. The amount of the rent reduction, following the RAC schedule adopted pursuant to Section 162.05. If the rent reduction calculation exceeds the cap set by the RAC schedule, the Department’s Decision shall describe the calculation and shall state that the rent reduction is limited by the schedule;
5. The date on which the rent reduction will be in effect. That date shall be the date of the General Manager Hearing Officer Decision;
6. The date on which an escrow account will be established. The Department will not accept payments into the escrow account until the rent reduction effective date;
7. Notice that the Department will collect a non-refundable administrative fee of $50.00 per residential unit accepted into REAP per month that will be collected in accordance with Section 161.12 and become a personal obligation of the property owner/landlord, and that the Department may pursue all other remedies provided by law and may collect any judgment, fee, cost, or charge, including any permit fees, fines, late charges, or interest, incurred in relation to the provisions of this Article as provided in Los Angeles Administrative Code Sections 7.35.1 through 7.35.8;
8. A statement describing the tenant protections set forth in Section 162.09; and
9. The date on which the General Manager’s Hearing will be held, including a statement that enforcement will be stayed until a final administrative decision is issued; that the General Manager Hearing Officer Decision will be the final administrative decision unless appealed pursuant to Section 162.06 C.; and that additional rent reductions may be imposed at the Hearing as set forth in Section 162.06.
E. The Department’s decision shall be served on the property owner/landlord by certified United States mail, postage prepaid and shall be served on all affected tenants by First Class mail as set forth in Section 161.409. (Amended by Ord. No. 184,446, Eff. 9/26/16.)
F. Upon accepting a unit or building into REAP, the Department shall consider whether the building should be referred for a periodic inspection pursuant to Section 161.602.
(Title and Section Amended by Ord. No. 184,446, Eff. 9/28/16.)
A. Rent Reduction Schedule. The RAC shall adopt by regulation a schedule setting forth the amount by which the rent shall be reduced, taking into account the nature of the violation, the severity of the conditions, and the history of past untenantable conditions. The RAC may set a maximum rent reduction if necessary to prevent abandonment of the property or exacerbation of health and safety violations. The Department, in accordance with such regulations and guidelines as the RAC may establish, shall have the authority to grant adjustments in rent.
B. Effective Date. The rent reduction effective date shall be the date of the General Manager Hearing Officer Decision affirming the placement into REAP.
(Title and Section Amended by Ord. No. 184,446, Eff. 9/28/16.)
A. Hearing.
1. The General Manager’s Hearing shall be set and held following the procedures set forth in Division 8 of Article 1 of Chapter XVI of this Code. To the extent feasible, the Hearing shall be coordinated with any General Manager’s Hearing scheduled under Section 161.801, et seq. The Department shall investigate whether there are other outstanding Orders against the building(s), structure(s) and/or premises, and, if so, shall provide notice of the Hearing to any additional tenants affected by those Orders.
2. Tenants or Enforcement Agencies may present proof that the violations specified in the Order, at the time the Order was issued, affected additional units that have not been inspected, or that there are additional outstanding Orders affecting the same or different units of the building, structure and/or premises that were not included in the original Decision of the Department.
3. The property owner/landlord may present proof that a rent reduction is not appropriate because the violations were caused by the tenants. The burden shall be on the property owner/landlord to prove that the tenants caused the violations.
4. The property owner/landlord and any tenant or Enforcement Agency may present proof that, due to extreme circumstances, acceptance into REAP or the rent reduction would jeopardize the health or safety of the tenants. The property owner/landlord has the burden of demonstrating unique, extreme circumstances that make any requested relief appropriate. The Department shall scrutinize such a request with particular caution when it is not supported by the tenants or the Enforcement Agency.
5. Before the General Manager’s Hearing begins, the property owner/landlord shall complete and submit a form provided by the Department that sets forth the names and current rents of all of the tenants in units subject to REAP.
B. General Manager Hearing Officer Decision.
1. The General Manager shall issue a Decision, as set forth in Division 8 of Article 1 of Chapter XVI of this Code, within ten working days of the hearing.
2. The General Manager may affirm, modify, or reverse the determination of the Department. The General Manager shall find that each of the factors set forth in Section 162.03 exists in affirming the acceptance of a building into REAP. The General Manager may modify or reverse the determination of the Department only upon making written findings setting forth specifically either:
(i) that the action of the Department was in error or constituted an abuse of discretion, or
(ii) there is new, relevant information which was not previously submitted either at the time of the referral to REAP due to mistake, surprise, inadvertence, lack of notice, or excusable neglect, which information supports a modification or reversal.
3. If the property owner/landlord was already in compliance with the Order before the date of General Manager’s Hearing, the Department’s Decision shall be reversed. If the Department’s Decision is affirmed in the General Manager Hearing Officer Decision, the rent reduction effective date shall be the date of the General Manager Hearing Officer Decision. The General Manager Hearing Officer Decision shall be the final administrative decision unless appealed to the RAC Appeals Board pursuant to Section 162.06 C.
4. If during the General Manager’s Hearing, a tenant or Enforcement Agency presents proof that the violations specified in the Order, at the time the Order was issued, affected additional units that had not been inspected, or that there are additional outstanding Orders affecting the building, structure and/or premises that were not included in the original Decision of the Department, the General Manager may order further rent reductions or include additional units in REAP.
Prior to determining that additional units not included in the original Decision of the Department pursuant to Section 162.04 D. will be subject to inclusion in REAP or rent reductions, the General Manager shall, if requested by the property owner/landlord, continue the hearing as to the additional units in order to provide an opportunity to be heard. The General Manager may issue a decision as to the rental units included in the original Decision of the Department prior to the continued hearing date or may wait and issue one General Manager Hearing Officer Decision covering all of the units. The effective date of rent reductions as to units included in the original Decision of the Department is identified in Sections 162.04 D.5. and 162.05 B. If the hearing is continued, the effective date of rent reductions as to additional units not included in the original Decision of the Department, will be the date of the General Manager Hearing Officer Decision issued after the hearing.
5. If the General Manager finds that the violations are of such a nature or extent that they are likely to be found in or affect several units, the General Manager may order the rent reduction extended to additional units that were not included in the original Decision of the Department without proof of an outstanding Order for those units. The General Manager Hearing Officer Decision shall state the findings justifying extending the rent reduction to additional units.
Prior to determining that additional units not included in the original Decision of the Department pursuant to Section 162.04 D. will be subject rent reduction, the General Manager shall, if requested by the property owner/landlord, continue the hearing as to the additional units in order to provide an opportunity to be heard. The General Manager may issue a Decision as to the rental units included in the original Decision of the Department prior to the continued hearing date or may wait and issue one General Manager Decision covering all of the units.
6. The General Manager may refer the building, unit or structure for a periodic inspection pursuant to Section 161.602. If the building has already had a periodic inspection within the past three years, the General Manager may order the property owner/landlord to pay an inspection fee pursuant to Section 161.901.2. (Amended by Ord. No. 185,644, Eff. 7/6/18.)
7. Under extraordinary circumstances, the Department may delay, reduce, stay or deny the rent reduction or escrow account, notwithstanding that the conditions set forth in Section 162.03 have been met, when to do otherwise would jeopardize the health or safety of the tenants or would violate the constitutional rights of any person. The mere reduction of income available to make repairs shall not constitute extraordinary circumstances. If the Department grants that relief, the General Manager Hearing Officer Decision shall state in detail the circumstances supporting the relief.
8. If the General Manager Hearing Officer Decision is to affirm the placement of the property into REAP, the property owner/landlord shall attend a REAP workshop provided by the Department within six months of the issuance of the Decision. There shall be no fee assessed to attend this workshop.
C. Appeal of General Manager Hearing Officer Decision. The property owner/landlord, any tenant, or the Enforcement Agency may appeal to the RAC Appeals Board following the procedures set forth in Division 10 of Article 1 of Chapter XVI. If a General Manager Hearing Officer Decision to place a property into REAP is appealed, enforcement of REAP will be stayed until the appeal is final. An application fee required pursuant to Section 161.1004 C.2. of this Code may be waived by the Department in accordance with the standards and procedures set forth in Section 151.14 C. (Amended by Ord. No. 185,644, Eff. 7/6/18.)
If the appeal is denied, the rent reduction shall be applied retroactively to the date of the General Manager Hearing Officer Decision pursuant to Section 162.06 B.3.
If the General Manager Hearing Officer Decision imposed additional rent reductions that were not included in the original acceptance into REAP, and if the violations on which those reductions were based have not been corrected by the time the appeal was filed, then the rent reduction(s) shall be applied retroactively to the date of the General Manager Hearing Officer Decision pursuant to Section 162.06 B.3.
(Added by Ord. No. 173,810, Eff. 4/16/01.)
A. Establishment of Account.
1. Within five business days after the decision accepting a building into REAP has become final, the Department shall establish as part of the REAP Trust Fund an account for the building into which tenants may deposit rent payments. The Department shall mail notification to all affected tenants of the existence of the escrow account, including an explanation of how payments may be deposited into the account and when the Department will begin to accept payments. The Department shall provide a receipt to each tenant making a deposit. The Department shall provide, at least once a month, a periodic report to the property owner/landlord concerning the activity in the escrow account. The records of the escrow account shall be made reasonably available to the property owner/landlord or any interested party, or their representatives, in accordance with the RAC Regulations, including the provision for payment of reasonable fees, as the RAC may promulgate. (Amended by Ord. No. 184,446, Eff. 9/26/16.)
2. Interest at a rate established by the Rent Adjustment Commission pursuant to the provisions of Paragraph a. of Subdivision 1. of Subsection B. of Section 151.06.02 of the Los Angeles Municipal Code shall accrue to the funds held in each account established by the Department pursuant to the provisions of Subdivision 1. of this Section, and shall be disbursed upon termination of the account in accordance with Subsection D. of Section 162.08. (Added by Ord. No. 177,119, Eff. 12/26/05.)
B. Withdrawals from Escrow Account.
1. The Department shall deduct a non-refundable administrative fee of $50.00 for each individual rent payment made into the account. Only one such fee shall be deducted for each residential unit for each month.
2. A property owner/landlord, any tenant, any Enforcement Agency, any interested party, and any creditor may apply to the General Manager for a release of funds from the escrow account, in accordance with the regulations the RAC shall enact. Withdrawals may be for the following reasons, in addition to other reasons adopted by regulation: (Amended by Ord. No. 184,446, Eff. 9/26/16.)
a. When necessary to prevent a significant diminution of an essential service to the building, including utilities;
b. When necessary for the correction of deficiencies, including but not limited to those that caused the acceptance into REAP;
c. When, to the extent legally permissible, requested by a tenant who has performed or wishes to repair conditions that affect the tenant’s health and safety, that result in a deprivation of housing services, as defined in Section 151.02, or that result in a habitability violation, as defined in Section 153.02. Those repairs are not limited to the repair of violations that caused the acceptance into REAP;
d. When requested by a tenant who wishes to or has relocated from the unit or building. These withdrawals are not limited to the amount of relocation assistance permitted by the RSO;
e. When requested by a tenant who has sustained expenses due to uninhabitable conditions; or
f. When ordered by a court.
3. Upon receipt of an application for release of funds, the General Manager shall hold a hearing following the procedures set forth in Division 8 of Article 1 of Chapter XVI of this Code. The General Manager shall order the release of funds from the escrow account where it has been demonstrated to the satisfaction of the General Manager that the conditions set forth in paragraph 2. above, or other conditions enacted by regulation, have been met. When necessary to address an imminent threat to the health or safety of the occupants, or to prevent the termination of utilities, the General Manager may release funds without a hearing or on shortened notice. The RAC shall promulgate regulations governing expedited releases. Any aggrieved party may appeal the General Manager’s decision to the Appeals Board following the procedures set forth in Division 10 of Article 1 of Chapter XVI of this Code. An application fee required pursuant to the provisions of Section 161.1002.2 may be waived by the Department in accordance with the standards and procedures set forth in the provisions of Section 151.14 C. (Last Sentence Added by Ord. No. 177,634, Eff. 7/22/06.)
4. If a building is in more than one escrow program of the Department (including REAP, UMP, URP or HEP) or if there are insufficient funds to address one or more requests for release of funds, the disbursement of funds in excess of the $50.00 administrative fee to make repairs and/or address the health and safety of the occupants, and/or to preserve essential services, shall be given priority over expenditures for other purposes. (Amended by Ord. No. 184,446, Eff. 9/26/16.)
5. The pendency of an unlawful detainer action or an unlawful detainer judgement shall not prevent the disbursement of funds to a tenant. The General Manager shall take into account the facts and circumstances of the unlawful detainer action.
6. The General Manager shall deny the application where it determines that the application is intended, in whole or in part, to circumvent the provisions of this article. A debt incurred subsequent to notice to a creditor that the building was under consideration for or had been selected for participation in REAP, shall be presumed, subject to rebuttal, to be for the purpose of circumventing the provisions of this article.
(Added by Ord. No. 173,810, Eff. 4/16/01.)
A. After receiving notice that all orders have been complied with and all violations have been corrected, including but not limited to those that caused the placement into REAP and any subsequent orders or violations, the Department may recommend to the City Council the termination of the rent reductions if it finds:
1. All orders affecting the units and the common areas have been signed off by the appropriate Enforcement Agency; and
2. There are no other outstanding Orders affecting the units or common areas of the building as set forth in Section 162.03 iii.
B. The Department may review an application from a property owner/landlord to terminate the rent reduction for certain units, notwithstanding the continuation of violations affecting other units, if the conditions set forth in Subsection A. are met for those units. The property owner/landlord may only submit one application for each property. The Department shall review any application and recommend termination only if it finds that only minor violations remain in the other units. (Amended by Ord. No. 184,446, Eff. 9/26/16.)
C. The Department may recommend termination of the escrow account if, in addition to the findings in Subsection A or B, it finds that any outstanding and non- appealable electric service and/or water charges pertaining to the property have been paid to the satisfaction of the Department of Water and Power of the City of Los Angeles.
D. If the City Council terminates the escrow account, any funds in that account shall be paid in the following order: (Amended by Ord. No. 184,446, Eff. 9/26/16.)
1. Any administrative fees authorized in Sections 162.07 B.1. and 162.12 that have not yet been collected. Before funds in the escrow account are paid for administrative fees, the Department shall process all applications for release of funds from the escrow account as described in Section 162.07 B.2.
2. Any outstanding fees, fines and penalties imposed pursuant to Article 1 of Chapter XVI of this Code.
If there are insufficient funds in the escrow account to pay the outstanding fees, fines and penalties in this Subsection, the property owner/landlord at the time City Council removes the property from REAP shall be responsible for payment of these fees, fines, and penalties. The Department may follow City guidelines for collections of any outstanding fees, fines and/or penalties.
Any escrow funds remaining after the expenditures as provided herein, and upon City Council removing the Property from REAP, shall be returned to the property owner who owned the property at the time the City Council authorizes the termination of the escrow account. The Department shall refund any remaining escrow account balance to the property owner recorded with the Los Angeles County Recorder’s Office.
E. As a condition of terminating the escrow account, the City Council may order an expedited systematic inspection pursuant to Section 161.805(6) and impose inspection fees, administrative costs and interest pursuant to Sections 161.901.1 through 161.903.1. The City Council may also condition termination of the escrow account on payment of those fees or any other unpaid fees under Subsection D. (Amended by Ord. No. 184,446, Eff. 9/26/16.)
F. If the City Council terminates the rent reduction, the rent will be restored to the original level 30 days after the Department mails the tenants notice of the restoration.
G. Monitoring Program. The City Council by resolution may release a building from REAP with the condition that the property owner/landlord prepay for two annual inspection as provided in Subsection D. herein for the purposes of monitoring the property. (Amended by Ord. No. 184,446, Eff. 9/26/16.)
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