United States: West Coast Real Estate Update: Feb. 16, 2016

Susan Booth, Karl Lott and Douglas Praw are Partners and Ashley Jason and Paul Park Associates in Holland & Knight's Los Angeles office
Stacie Goeddel and Robert Haight Jr. are Partners in Holland & Knight's San Francisco office

Los Angeles Ballot Proposal To Halt Developer's Zoning Changes

A group called "Coalition to Preserve L.A." is proposing a ballot measure that would impose a two-year moratorium on all projects in the city of Los Angeles that require zoning or general plan changes. The group seeks to stop the types of new large developments that have recently received approvals throughout the city.

The measure would effectively halt a large number of development projects, since many projects require zoning changes given the complexities of the Los Angeles zoning code. Not only would the measure affect the so-called "megaprojects," but it also has the potential to halt the construction of new affordable housing projects and transit-oriented development projects. It could also stop other projects that are called for in the mayor's plans to increase the housing supply in Los Angeles to help reduce homelessness and his plans to increase the use of public transportation.

Mayor Eric Garcetti and Los Angeles City Councilman Mitch O'Farrell have announced their opposition to the ballot measure and have reached out to the organizers in an attempt to reach a compromise that would avoid placing the measure on the November ballot. The mayor has suggested minimizing the use of "spot zoning" and variances in order to satisfy the group's primary objections to the current system.

Efforts to Identify the Beneficial Owners of Real Estate and Other Companies Continue

The Incorporation Transparency and Law Enforcement Assistance Act (Transparency Act) represents the latest effort by the federal government to reduce money laundering and identify potential funding sources of terrorist activities. The Transparency Act was first introduced into Congress in 2008. Since that time, it has died and been reborn on multiple occasions. On Feb. 3, 2016, it was reintroduced as a bill in both the House of Representatives and the Senate.

The Transparency Act, if passed, would impose new reporting obligations upon each corporation and limited liability company (LLC) formed within the United States. Specifically, each corporation and LLC would be required to report to the state of its formation certain information, including name, address and current U.S. passport or state driver's license, for the individual persons who are directly or indirectly the "beneficial owners," or the persons who have direct or indirect control over the corporation or LLC. Each corporation and LLC would also have an ongoing obligation to update the information within a short time following any change. If an individual state does not have the ability to collect the information, then the Department of the Treasury would collect the information. The Transparency Act is intended to prevent individuals from hiding behind corporate facades.

Residential Communities: Proposed Relief from Election Requirements

A new bill, AB 1799, was introduced on Feb. 8, 2016, to amend the Member Election article of the Davis-Stirling Common Interest Development Act to exempt uncontested director elections from the act's stricter election requirements. These requirements are only applicable to votes on certain key issues that could affect the operation of the community, which include election and removal of directors, assessments and amendment of governing documents, as well as any other topic identified in the association rules as being subject to such requirements. Under the Member Election article, the association is required, among other things, to engage up to three qualified third parties to serve as inspectors of elections. The inspectors oversee the election, from determining the number of memberships eligible to vote and tabulating the results to deciding any challenges in connection with a member's right to vote. This amendment would eliminate what many associations and managers have viewed as unnecessary process and expense in an uncontested directors election.

The proposed bill provides that an election is "uncontested" if the number of candidates for election does not exceed the number of directors to be elected at the election. The proposed bill may be heard in committee on March 10, 2016, and further clarification is expected since certain requirements under the Member Election article, like establishing procedures for nominations, must be fulfilled prior to determining if an election of directors is in fact "uncontested."

Los Angeles Appellate Court Cracks Down on Certain Airbnb Use

The Appellate Division of the Los Angeles Superior Court held that a landlord has grounds to evict a tenant for unlawfully renting a room in his or her apartment using Airbnb, where such use constitutes an illegal use of the premises under the Los Angeles Municipal Code (LAMC). Airbnb describes itself as a "community marketplace" for people to list and book properties and has purportedly served more than 60 million guests in more than 34,000 cities around the world. In light of its popularity, constituents of certain parts of Southern California have made efforts to restrict the use of short-term rentals through Airbnb.

In Chen v. Kraft, 2016 S.O.S. 269, the defendant occupied a rent-controlled premises in Venice, Calif., – a popular tourist destination in Los Angeles – pursuant to a lease agreement entered into with the plaintiff's predecessor in interest. The defendant had even negotiated an addendum to the original lease agreement with the plaintiff's predecessor in interest to expressly permit the defendant's hosting guests through Airbnb. The plaintiff subsequently filed a complaint in unlawful detainer alleging that the defendant failed to comply with, among other things, the 10-day notice to stop illegally subletting the unit by allowing subtenants and short-term renters to reside on the premises.

The court affirmed the judgment of the lower court and granted the plaintiff's motion for summary judgment, recognizing that the premises were located within an R1 One-Family Zone, where permitted use did not include a bed-and-breakfast facility or a transient occupancy residential structure, as defined in the LAMC. Even though the defendant claimed that the lease addendum allowed her to engage in Airbnb activities, the court found that such contract was void and unenforceable as it was in violation of existing regulations.

As Airbnb continues to grow in popularity, there will likely be further developments in how it, along with other short-term rental service providers, operates with the various local municipalities. Local landlords and tenants must stay apprised of such developments as they relate to existing regulations.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.