Koreatown landlord settles lawsuit alleging it forced out rent-controlled tenants

Optimus Properties will pay nearly $2.5M, after accusations it wanted to dramatically raise rents to attract younger, wealthier residents

Los Angeles /
Oct.October 22, 2018 10:00 AM
Optimus Properties LLC principals Kamyar Shabani and K. Joseph Shabani and Koreatown

Two years ago, tenants in five rent-controlled Koreatown buildings filed a federal lawsuit against the landlord, Optimus Properties LLC, charging it pressured Latino and mentally disabled residents to leave the apartments in order to raise rents.

Now, Optimus has agreed to pay nearly $2.5 million as part of a settlement, the Los Angeles Times reported.

The Century City-based firm and five affiliated companies also agreed to make needed repairs at the buildings, and to provide property managers with fair-housing training. The settlement does not include an admission of guilt.

Optimus owns around two-dozen multifamily properties around Los Angeles, along with retail and office properties. The company is led by brothers Kamyar and K. Joseph Shabani.

The company will now accept late payments from three disabled tenants who received multiple eviction notices for paying up to five days late, while they waited for their Social Security checks. Optimus also agreed to reserve the next seven vacancies at its buildings for tenants receiving federal subsidies from the Section 8 housing program.

The settlement entitles 13 tenants to $52,000 each. Another $208,000 will go to two groups that advocated and provided services to the tenants, who filed the suit in 2016.

The lawsuit alleged the landlords’ plan was to drive out existing tenants and flip the property to younger, wealthier tenants at much higher rents. It’s a common, but risky and often illegal strategy seen in L.A.’s gentrifying neighborhoods, when investors look to quickly flip multifamily properties, real estate pros say.

Tenants said they received notices about illegal rent increases, requests to enter their units and notices to pay rent in three days or vacate their units, according to the Times [LAT]Dennis Lynch


Related Articles

arrow_forward_ios
Renderings of One Beverly Hills and Beny Alagem. (One Beverly Hills, Getty)
Beny Alagem’s $2B Beverly Hills project gets go-ahead
Beny Alagem’s $2B Beverly Hills project gets go-ahead
The San Pedro Fish Market is one of the top-grossing restaurants in the U.S. (Getty, Facebook via San Pedro Fish Market and Restaurant / Photo Illustration by Alison Bushor for The Real Deal)
San Pedro Fish Market plans new “supersize” restaurant
San Pedro Fish Market plans new “supersize” restaurant
Renderings of the project (The Harper on Sunset)
Hotel, apartment complex planned for northeast end of West Hollywood’s Sunset Strip
Hotel, apartment complex planned for northeast end of West Hollywood’s Sunset Strip
The Chateau Marmont (Getty) and protest signs (Unite Here Local 11)
Chateau Marmont workers say iconic West Hollywood hotel misused rescue funds
Chateau Marmont workers say iconic West Hollywood hotel misused rescue funds
Rendering of the project (Triangle Culver City)
Bastion Development plans another apartment complex on Culver City border
Bastion Development plans another apartment complex on Culver City border
Taix French Restaurant and Holland Partner Group’s Clyde Holland (Google Maps)
Battle heats up over Holland Partner Group’s plans to redevelop Taix restaurant
Battle heats up over Holland Partner Group’s plans to redevelop Taix restaurant
Small Business Administration administrator Isabel Guzman (Getty, iStock)
Starved for relief: Restaurants seek $76B, far more than budgeted
Starved for relief: Restaurants seek $76B, far more than budgeted
2649-2657 W. San Marino Street (Google Maps)
Westlake apartment project could replace century-old buildings
Westlake apartment project could replace century-old buildings
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...