A former tenant, now homeless, is invoking a federal law normally used to fight organized crime to sue her former landlord.
The woman filed the suit naming her landlord, along with an attorney and other “co-conspirators”, accusing them of engaging in racketeering in a scheme to free rental properties from Los Angeles rent stabilization requirements.
The tenant says she thinks the federal judge hearing the case is “annoyed that I filed this at the federal level. He heard the words landlord and tenant and automatically assumed that it was a simple landlord-tenant dispute. I did a poor job of explaining the federal implications but my case meets the threshold of extortion as the defendants stole property through abuse of their office and authority.”
The complaint, filed in the U.S. District Court in downtown Los Angeles, alleges an extortion scheme that used eviction shakedowns to unlawfully obtain rent-regulated property. According to the tenant, investors who purchased her former rental property banked on the next wave of neighborhood gentrification. The high returns demanded by the speculative multi-million dollar purchase required kicking out modest rent tenants to re-rent the units profitably.
It was a predatory equity scheme that involved an investment firm who successfully obtained equity from private and public sources by promising a high rate-of-return on investment, and then used aggressive, extortionist litigation to strong-arm tenants out, she says
The lawsuit alleges that continuous intimidation, threats of eviction, threats of homelessness and financial injury were all used to induce her to move. The strategy involved repeated, baseless unlawful detainer lawsuits to force tenants out.
The tenant says that, using the racketeering scheme which skirted the Los Angeles Rent Stabilization Ordinance, the defendants avoided a potential payout of $439,200 in relocation assistance payments to tenants, which would have been required under the current rental laws.
The tenant says she has taken up residence in downtown’s Skid Row, just a few blocks from the federal courthouse. “It isn’t as frightening as it sounds. I’ve received several marriage proposals down here and the rats are uncharacteristically polite, she says” She vows to continue living there until her case is settled.
With AAOA, landlords have resources at their fingertips. Check out our new Landlord Forms Page.
American Apartment Owners Association offers discounts on products and services for landlords related to your rental housing investment, including rental forms, tenant debt collection, tenant background checks, insurance and financing. Find out more at www.joinaaoa.org.