SEC. 162.08. TERMINATION OF REAP.

(Added by Ord. No. 173,810, Eff. 4/16/01.)

A. After receiving notice that all orders have been complied with and all violations have been corrected, including but not limited to those that caused the placement into REAP and any subsequent orders or violations, the Department may recommend to the City Council the termination of the rent reductions if it finds:

1. All orders affecting the units and the common areas have been signed off by the appropriate Enforcement Agency; and

2. There are no other outstanding Orders affecting the units or common areas of the building as set forth in Section 162.03 iii.

B. The Department may review an application from a property owner/landlord to terminate the rent reduction for certain units, notwithstanding the continuation of violations affecting other units, if the conditions set forth in Subsection A. are met for those units. The property owner/landlord may only submit one application for each property. The Department shall review any application and recommend termination only if it finds that only minor violations remain in the other units. (Amended by Ord. No. 184,446, Eff. 9/26/16.)

C. The Department may recommend termination of the escrow account if, in addition to the findings in Subsection A or B, it finds that any outstanding and non- appealable electric service and/or water charges pertaining to the property have been paid to the satisfaction of the Department of Water and Power of the City of Los Angeles.

D. If the City Council terminates the escrow account, any funds in that account shall be paid in the following order: (Amended by Ord. No. 184,446, Eff. 9/26/16.)

1. Any administrative fees authorized in Sections 162.07 B.1. and 162.12 that have not yet been collected. Before funds in the escrow account are paid for administrative fees, the Department shall process all applications for release of funds from the escrow account as described in Section 162.07 B.2.

2. Any outstanding fees, fines and penalties imposed pursuant to Article 1 of Chapter XVI of this Code.

3. Any outstanding rent registration fees or fines in an RSO building and any penalties pertaining thereto pursuant to Sections 151.05 and 151.15.

4. If applicable, pursuant to Section 161.901.2, prepayment of two annual inspection fees, beyond the initial inspection and re-inspection fee set forth in the Systematic Code Enforcement Program and Section 161.352, to the Department for each property that was included in REAP.

If there are insufficient funds in the escrow account to pay the outstanding fees, fines and penalties in this Subsection, the property owner/landlord at the time City Council removes the property from REAP shall be responsible for payment of these fees, fines, and penalties. The Department may follow City guidelines for collections of any outstanding fees, fines and/or penalties.

Any escrow funds remaining after the expenditures as provided herein, and upon City Council removing the Property from REAP, shall be returned to the property owner who owned the property at the time the City Council authorizes the termination of the escrow account. The Department shall refund any remaining escrow account balance to the property owner recorded with the Los Angeles County Recorder’s Office.

E. As a condition of terminating the escrow account, the City Council may order an expedited systematic inspection pursuant to Section 161.805(6) and impose inspection fees, administrative costs and interest pursuant to Sections 161.901.1 through 161.903.1. The City Council may also condition termination of the escrow account on payment of those fees or any other unpaid fees under Subsection D. (Amended by Ord. No. 184,446, Eff. 9/26/16.)

F. If the City Council terminates the rent reduction, the rent will be restored to the original level 30 days after the Department mails the tenants notice of the restoration.

G. Monitoring Program. The City Council by resolution may release a building from REAP with the condition that the property owner/landlord prepay for two annual inspection as provided in Subsection D. herein for the purposes of monitoring the property. (Amended by Ord. No. 184,446, Eff. 9/26/16.)

SEC. 162.09. TENANT PROTECTIONS.

(Amended by Ord. No. 184,446, Eff. 9/26/16.)

A. Evictions.

1. The gross amount of payment made into the escrow account by or on behalf of a tenant shall be deemed as a payment in the same amount to the property owner/landlord, including, but not limited to, for the purpose of determining whether a tenant has paid rent as provided in Section 151.09 A.1. of this Code and/or state law. In any action by a property owner/landlord to recover possession of a residential unit, the tenant may raise the fact of payments into a REAP escrow account as an affirmative defense in the same manner as if the payments had been made to and accepted by the property owner/landlord.

2. While a unit is in REAP, before bringing an action to recover possession on the basis of nonpayment of rent, the property owner/landlord shall have a duty to verify in writing with the Department that the tenant has not paid their rent to a Department escrow account. The Department shall respond within three business days to any request for verification. The property owner/landlord shall not bring an action to recover possession on the basis of nonpayment of rent without making this inquiry or if the tenant or the Department presents proof that the tenant has paid the rent demanded to the Department. The violation of this section shall not be a misdemeanor.

3. Regardless whether the unit is covered by the RSO, until the unit is removed from REAP and for 180 days thereafter, or until expiration of the period called for under Section 161.806, if applicable, whichever is later, the property owner/landlord may bring an action to recover possession of the unit only upon the grounds set forth in Section 151.09 A.

4. If the intent of a property owner/landlord in seeking to recover possession of a rental unit is retaliation against a tenant or Enforcement Agency’s exercise of rights and/or duties under this Article, and if the tenant is not in default as to the payment of rent, then the property owner/landlord may not recover possession of a rental unit in any action or proceeding or cause the tenant to quit voluntarily. Until the unit is removed from REAP and for one year thereafter, the property owner/landlord shall have the burden of proving that any action to recover possession, other than one based on nonpayment of rent, is not brought for the purposes of retaliation.

5. In any action by a property owner/landlord to recover possession of a rental unit, the tenant may raise as a defense any grounds set forth in this Section. If the tenant is the prevailing party, the tenant shall be entitled to recover reasonable attorneys’ fees and expenses.

B. Rent Increases.

1. Until the unit is removed from REAP and for one year thereafter, or until expiration of the period called for under Section 161.807, if applicable, whichever is later, the landlord or any subsequent landlord shall not increase the rent for any current or subsequent tenant except as provided by the Costa Hawkins Rental Housing Act, Civil Code Section 1954.50, et. seq., and/or applicable state law.

2. If the unit is covered by Chapter XV of the Los Angeles Municipal Code (Rent Stabilization Ordinance), no rent increase shall be allowed pursuant to Section 151.07 for reimbursement of costs for any corrections necessary to comply with the Order that resulted in the placement into REAP or any additional Orders issued while in REAP.

C. Civil Actions. Any property owner/landlord who violates any of the provisions of this section or who retaliates against a tenant or an Enforcement Agency for the exercise of rights and/or duties under this article shall be liable in a civil action for damages and a penalty of $1,000 per violation, together with reasonable attorneys’ fees and expenses. Any judgment awarded in such an action may be collected from the escrow account upon application as set forth in Section 162.07 B.