(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.