In a move to force landlords to fix leaky pipes and faulty wiring, a Los Angeles City Council committee endorsed a plan Thursday to allow tenants to deposit their rents into a special escrow account to be used for repairs.
The plan, patterned after a similar program operating in Detroit, also would penalize landlords by charging them major fees above the cost of repairs. Furthermore, landlords forced to enter the program would be barred from passing along any of the added costs to their tenants.
The council's Governmental Operations Committee sent the proposal to the full City Council for consideration.
In its present form, the plan would require landlords of apartment buildings cited by Building and Safety officials as unsafe or substandard to make immediate repairs, unless landlords successfully appealed the citations.
If the landlord lost his appeal and still refused to make repairs, the city's Community Development Department would alert tenants that they have the option of either paying their rent to the landlord or depositing it in the special repair account.
Barbara Zeidman, director of the city's rent control program and one of the architects of the plan, said a landlord would have major financial incentives to repair his buildings before an escrow account is established. Zeidman said that once rents entered the escrow account, the landlord's cash flow would be interrupted. Also, the landlord would be required to set up the escrow account, at a cost of as much as $3,000. Finally, the landlord would be charged an administrative fee that would amount to 40% of the cost of the repairs.
Zeidman offered an example of how the costs would mount. She said that the landlord of a 20-unit building collecting average monthly rents of $300 per unit, and needing $5,000 in repairs, would be required to pay about $4,000 in administrative and escrow fees.
"We want to show (the landlords) we're serious about this," Zeidman told the council's Governmental Operations Committee during a hearing on the proposal Thursday. "The success of the program would be to never have to use it."
Officials said that some apartment buildings are so run down that rents could be not gathered quickly enough to pay for needed repairs. In these cases, Zeidman said, the city could attach a tax lien on the properties or even prosecute the owners as slumlords.
Zeidman said the program is designed mainly to obtain repairs on apartment buildings before they slip into a dilapidated state. She said that under current laws, there are not enough incentives for landlords to make repairs.