Will Beverly Hills add a cash for keys disclosure?

The City of Beverly Hills may add a disclosure in its Rent Stabilization Ordinance that would allow property-owners to offer tenants money in exchange for voluntarily vacating their properties.

Beverly Hills city councilmembers requested the Rent Stabilization Commission last Thursday to consider whether the city should add such a disclosure, referred to as “cash for keys.” Such disclosures are already offered in the City of Los Angeles, West Hollywood and Santa Monica.

Cash for keys disclosures can be applicable in situations where property-owners need tenants to vacate their property, such as for renovations or sales.

According to a city staff report, adding a tenant buyout offer would allow for fairness in tenant-owner buyout negotiations and agreements. Essentially, the disclosure would add language to the city’s municipal code that formalizes the process of compensating tenants in exchange for them leaving their units, and ensures tenants are made aware of their rights.

After almost two hours of discussion, the amendment failed to be recommended with a 2-4 vote. Commissioners Donna Tryfman and Gwen Owens were the dissenting votes in approval of recommending the ordinance.

Chair Lou Milkowski later polled his fellow commissioners to see where they stood on moving forward with the amendment in a future meeting. Vice Chair Neal Baseman and Commissioners Remmie Maden and Frances Miller were opposed, while Commissioners Tryfman, Owens and Kathy Bronte were in favor. Milkowski did not then indicate his position.

Maden said she thought advising tenants of their rights was critical.

“Even if we don’t say [the amendment] goes into the municipal code, I don’t want people to feel this is the end of the conversation,” Maden said. “There needs to be a conversation about protecting tenant rights and [the amendment] just isn’t the best way to do it.”

Miller said she’d like to see the commission go line-by-line on the draft ordinance with Deputy Director of Rent Stabilization Helen Morales, as well as the city attorney, because of potential ambiguity in the wording.

“Again, for the landlord it really becomes a lot of pitfalls for us so we want to make sure we’re not setting ourselves up,” Miller said.

Cash for keys provisions in other cities often require property owners to provide tenants with notice of their rights under the RSO and submit disclosure notices and buyout agreements to the city.

Beverly Hills city staff recommended the city’s disclosure notice require owners to inform tenants of their rights a minimum of 10 days before their buyout offer is made. According to a city staff report, these notices would potentially include the following information:

• Tenants have the right to not enter into buyout negotiations and accept the offer.
• Tenants cannot be retaliated against or evicted for choosing to not enter negotiations or accept an offer.
• Tenants have a right to speak with an attorney or the city’s rent stabilization office.
• Tenants have a 30-day period to rescind the buyout agreement.
• The city’s municipal code’s current relocation amounts and tenants rights under no fault evictions.
• Tenants have the right to contact the Rent Stabilization Division for help.
• Acknowledgement that the tenant received the disclosure notice.

Miller expressed concerns over the proposed ordinance language, specifically citing the sentence which stated tenants cannot be retaliated against. She said her fear was that tenants would be the ones to retaliate.

“The tenants retaliate too – that’s never ever addressed in any of this. I have fear of my tenants,” Miller said. “I don’t want to offend them – I don’t want to get on their wrong side.”

She provided a hypothetical example of tenants throwing cement into her toilet and flushing it down.

“They’re living in my house and they can do whatever they want, I have no rights,” Miller added.

Bronte said she’s fine with the concept of cash for keys in theory, but that there are confusing and unclear sentences in the draft ordinance that should be looked over.

“Conceptually, the whole idea is to give people opportunities to empty a building, to ask someone to leave or vacate, to move on, to do whatever a landlord wants to do and then to have a tenant feel compensated for,” Bronte said.

The commission will discuss the provision again on October 7.