Rexford sues industrial tenant for nonpayment, a pandemic rarity

One of LA’s largest industrial landlords filed to evict hair care firm, which countersued claiming moratorium ban remains in effect

Los Angeles /
Oct.October 06, 2021 12:00 PM
View of 25413 Rye Canyon Road and Rexford Industrial Realty co-CEOs Michael Frankel and Howard Schwimmer (rexfordindustrial.com, iStock.com)

Throughout the pandemic, numerous Los Angeles commercial landlords have sued their retail and office tenants for nonpayment.

Meanwhile, the industrial sector has largely escaped much of those problems as strong demand for warehouses and distribution centers have helped sustain tenants and owners.

But now, one of L.A’s largest industrial landlords is suing to evict a tenant for nonpayment in a case that dates back to the early days of the pandemic.

Rexford Industrial Realty filed to evict Stephen Mastey – founder of hair care firm DermOrganic Laboratories — in August. The company claimed Mastey failed to pay rent on his 20,000 square feet of space in Santa Clarita in April and May 2020, which coincided with the Covid lockdown. Rexford is seeking $43,000 in unpaid rent for those two months, court records show.

This week, Mastey hit back with his own suit, alleging wrongful eviction given that L.A. County is still banning commercial evictions. The county extended its commercial eviction moratorium, which prohibites landlords from evicting commercial tenants through January.

He is now seeking $754,000 in damages, including security deposit and $125,000 in punitive damages, as well as a halt on the eviction proceeding.

In 2019, Mastey signed a five-year lease with Rexford at 25413 Rye Canyon Road, according to court documents. Mastey paid $14,328 in base rent for the first year and $14,758 for the second, as well as a $100,000 security deposit and a portion of operating expenses.

In his suit, Mastey said he was only unable to pay rent for March and April of 2020, due to the pandemic. Mastey added that Rexford took out the rent payments from his security deposit.

Under L.A. County’s eviction moratorium, commercial tenants must provide a notice they are unable to pay rent within seven days that rent is due. For firms with fewer than nine employees, they do not need to provide any written proof that they’ve suffered financial hardship because of the pandemic. In his suit, Mastey said he has fewer than nine employees.

In Rexford’s eviction suit, the firm claims it served Mastey with a notice to pay the owed two months of rent in June of this year. Mastey denied this in his suit.

Neither Rexford nor Mastey immediately responded to a request for comment.





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