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

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