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Appellate Win Allows Former Rent-Controlled Tenants to Proceed with Class Action

Jianna Maarten et al. v. Isaac Cohanzed et al., Case No. B308055 in the Second Appellate Division, California Court of Appeal

In a momentous win for affordable housing, the California Court of Appeal has reinstated a class action lawsuit that champions access to justice for former rent-controlled tenants. The plaintiffs assert that their former landlord unlawfully evicted them from their Los Angeles homes, which were under rent control, to make room for luxury apartments. Furthermore, the plaintiffs allege that the landlord deceitfully misrepresented their intentions to the government.

The lawsuit was filed in 2019 by 15 ex-tenants against the real estate developer Wiseman Management and other related parties. The crux of the suit revolves around Wiseman’s supposed practice of acquiring rent-controlled buildings, duping the City of Los Angeles into approving their eviction plans, and subsequently listing the units on Airbnb for long-term rentals before demolishing them and replacing them with pricey luxury apartments. The plaintiffs have brought claims under California’s Ellis Act, the Los Angeles Rent Stabilization Ordinance, and the California Unfair Competition Law.

Initially, the trial court ruled against the plaintiffs, preventing them from pursuing the case as a class action due to the need to individually examine each unit alleged to have been re-rented by Wiseman. However, the appeals court has reversed this decision, asserting that under California and Los Angeles affordable housing laws, if a landlord re-rents any unit in a property within the prohibited timeframe, they become liable to all the former tenants illegally evicted from that property, not just the tenants in the re-rented units. This groundbreaking ruling opens the door for the case to proceed as a class action, as there is no need to present evidence on every unit to establish liability. Additionally, the appeals court acknowledged that the plaintiffs have presented sufficient facts to support the case moving forward as a class action.

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