Did I screw up? Los Angeles RSO-Owner Occupancy

[Kate Watson]

Long time lurker. Finally signed up to get some answers.

My SO and I own a duplex in Los Angeles. We’re trying to get long term tenants to leave. It’s hard to do with the commie rules about rent stabilized properties. They’ve been there 15 years so even with a 3 or 4% increase, it’s under market. We offered them $20K to leave. They hired a lawyer. No idea why.

Years ago I rehabbed the other side of my duplex and started short term renting it. It’s super nice and provided a great side income. After receiving complaints, I temporarily exempted the unit from RSO for owner occupancy. We do use that unit on holidays so I figured why not. If inspectors came out to investigate, I could always say the short term renters were relatives. Worked beautifully for many years.

The wonderful city in its infinite wisdom has decided no one can short term rent in RSO properties. The Airbnb money train has ended. So sad.

So back to the other side of my duplex which is badly in need of rehab. I want it back. I could put some money into it and at least double the rent. We told them my father needed the unit. They didn’t budge. When these people didn’t take our offer for $20K to move, we filed the city paperwork to take back the unit for owner occupancy (relative needs unit.) They will just get a smaller relocation amount because they didn’t take my original offer.

That was a month ago. I still haven’t received the approved landlord declaration back from the city. So I can’t serve them with the 60 day notice to move out.

Questions:
How long does the city take to approve a landlord declaration? Could it be held up this long? Is that normal? Can the city say no?

Why would my tenants retain a lawyer? Should I be concerned? I don’t want to hire a lawyer but do I need to? My SO thinks I screwed something up.

Am I legally allowed to owner occupy both sides of an RSO duplex? I read that if there is a vacant, comparable unit on the lot, the city won’t approve. Why? The other duplex is brand new. We can make 4x’s the rent on that side. Yeah, same number of bedrooms but it’s fully furnished and everything is new and gorgeous.

I have to pay the people on the dumpy side 8K to move. I don’t think that’s fair. I’ll do it if the city requires because I want that unit back. I can’t believe they turned down $20K. Now they’re only getting $8K. With them hiring a lawyer, maybe I’m not informed. Can they fight me on this? I’m starting to worry because I haven’t seen any boxes or packing. Not that I’m there very often. We live across town.

Any help from those of you dealing with these type issues?

[Nathan Gesner]

Your tenant is retaining an attorney because it's cheaper to scare you than it is to move and then pay market rates. They have a good deal and they want to keep it.

This is an example of why it's important for Landlords to stay on top of rent increases, even if it's just 2-3% per year. If you get too far behind and then government gets involved, you can lose out on thousands or tens of thousands in income.