A federal judge has dismissed a $100 million lawsuit filed by a building management company claiming severe losses due to Los Angeles’ eviction moratorium to protect renters during the COVID-19 pandemic, according to court papers obtained Wednesday.
GHP Management Corp. alleges in the lawsuit that 12 of its buildings lost more than $20 million in rental income due to the ordinance. GHP — which manages several large apartment complexes including Da Vinci, Ferrante, the Medici and the Orsini — is owned by developer Geoffrey Palmer. Other companies owned by Palmer joined the lawsuit.
U.S. District Judge Dean Pregerson dismissed the suit last week, finding that the eviction ordinance covers only a limited period of time and did not reflect a permanent seizure of property, which would have required landlords to be compensated by the city, according to the Nov. 17 ruling filed in L.A. federal court.
A spokesperson for GHP Management could not immediately be reached for comment.
Los Angeles County’s eviction moratorium is still in effect. People who can’t pay rent due to the pandemic cannot be evicted for at least 12 months after the local emergency period expires. Once the moratorium ends, tenants will have a year to pay past-due rent. The ordinance bars landlords from charging interest or late fees.
Palmer’s lawsuit claims that his companies are entitled to more than $100 million because the city violated the “takings clause” of the Fifth Amendment, which requires just compensation when private property is taken for public use.
“While the eviction moratorium ostensibly protects tenants who are unable to pay rent due to circumstances related to the COVID-19 pandemic, it arbitrarily shifts the financial burden onto property owners, many of whom were already suffering financial hardship as a result of the pandemic and have no equivalent remedy at law,” the lawsuit stated.
Landlords in Los Angeles are eligible to receive rent relief for back rent owed by tenants who couldn’t pay due to the pandemic.
The dismissal ruling allows the plaintiffs the opportunity to amend the lawsuit and refile it within 21 days.