Court: California Court of Appeal; August 6, 1992; California; State Appellate Court
In March 1991, an unlawful detainer action was initiated by the respondent to evict the appellant from a garage unit that had been used as living quarters for approximately four years. An order from a department of building and safety had been in effect since around 1989, requiring the respondent to stop the illegal use of the space. The appellant responded with a general denial and various affirmative defenses, including claims of untenantability and applicability of the Los Angeles Rent Stabilization Ordinance (RSO).
The trial court determined that the appellant owed no rent to the respondent but still awarded possession of the premises to the respondent. On appeal, the appellant argued that the court erred because the respondent had not paid the required relocation benefits under the RSO. The appellate court agreed, emphasizing that the respondent owed relocation benefits, as specified in the RSO. Under Section 151.09(A)(11) of the RSO, a landlord can evict a tenant to comply with a governmental order but must provide relocation benefits. Section 151.09(G) mandates a $5,000 relocation fee for qualified tenants and $2,000 for others if the eviction is based on specified grounds.
The court examined whether a tenant can retain possession until relocation benefits are provided, even in unlawful occupancy situations. Generally, if a contract's object is illegal, the entire contract is void, and neither party can enforce it. In cases of unlawful occupancy violating zoning laws, the lease is void, preventing the landlord from claiming back rent and the tenant from claiming possession.
However, the appellant contended that the RSO allows a tenant to remain in possession despite the eviction basis if relocation benefits are unpaid. Section 151.09(H) allows a tenant to raise the landlord's failure to comply with relocation benefit provisions as an affirmative defense in possession recovery actions. The court concluded that the RSO's intent is to prevent a landlord from evicting a tenant in an unlawful detainer action if the tenant successfully raises the defense of unpaid relocation benefits, even if the eviction is due to illegal occupancy.
Enforcement of the relocation benefit provisions of the Rent Stabilization Ordinance (RSO) conflicts with the enforcement of the city’s building and zoning codes in cases of illegal occupancy. However, the Los Angeles City Council prioritized enforcement of the RSO, recognizing that the passage of Ordinance No. 164685 would delay enforcement of zoning and building codes. The legislative history indicates that the council aimed to address illegal conversions, asserting that property owners must cease such practices that undermine the city’s housing policy and violate zoning laws.
The council acknowledged existing RSO provisions requiring payment of relocation assistance within 15 days of notice termination and that failure to pay would defeat an action for possession. The legislature is presumed to know current law when enacting statutes, and the absence of amendments to these provisions suggests an intention to maintain the status quo. This interpretation aligns with the goal of the RSO to ensure tenants have financial means for relocation before eviction.
The council classified evictions due to illegal conversions as 'no fault' grounds for tenants, placing pressure on landlords to comply with both the RSO and zoning laws. Landlords remain subject to criminal prosecution for non-compliance as long as they fail to provide mandated relocation benefits. An exception exists for hazardous conditions, where the department of building and safety can require tenant vacating or the city can abate the nuisance.
In this case, the respondent admitted to not paying the relocation benefits, providing the appellant with a defense against the respondent's possession claim. Consequently, the judgment favoring the landlord for possession is reversed, and judgment is entered in favor of the appellant, who is also entitled to recover costs on appeal.
Roberson and Johnson concurred on the legal implications of occupancy regarding housing code compliance. When occupancy is legal but the units have correctable defects that substantially breach the implied warranty of habitability, tenants may remain in possession without paying contract rent but owe reasonable value for the use of the property in its defective state. Under Section 151.09, subsection H, landlords failing to provide required monetary relocation assistance can be liable to tenants for damages and attorney fees. The appellant successfully raised the landlord's failure to pay relocation benefits as an affirmative defense, arguing that this failure should bar the landlord's action for possession. The case also involves the priority of two city ordinances, though it does not address whether a city can tie eviction orders to compliance with relocation assistance provisions. The RSO recognizes that tenants are not at fault and that the landlord-tenant relationship persists until relocation benefits are paid, creating an obligation to pay for the reasonable value of the property's use, even if the lease is void due to illegal use. This obligation holds under both privity of estate and contractual theories, as established in relevant case law. The trial court's decision not to award any money implied that it found the premises had no value.
