LA City Sues Short-Term Rental Firm Nightfall Group

Mokhtar Jabli of Ultimate Host has seen lawsuits from customers and partners, but now the luxe short-term rental impresario faces legal action from the Los Angeles City Attorney’s Office.

A new division of the city attorney’s office, the Public Rights Branch, is handling the suit. City Attorney Hydee Feldstein Soto said the Public Rights Branch will advocate for fields such as consumer protection, environment, nuisance abatement and unfair business practices.

“These party houses have deleterious and serious effects on the quality of life for our city,” she said in a statement. “They disrupt communities, violate noise ordinances until the wee hours of the morning, clog evacuation routes, and take valuable housing off the market. I expect this is the first of the enforcement actions we will need to bring.”

The city attorney filed a lawsuit last week against Jabili and his colleagues working under the business name of The Nightfall Group, a firm that specializes in large luxury mansions in the L.A. market. The suit alleges the defendants violated the city’s Short-Term Rental Ordinance and its Party House Ordinance, as well as California’s unfair competition law and public nuisance statutes.

The suit alleges Nightfall flouted the city’s rules for short-term rentals designed to discourage property owners from turning mansions into de facto hotels. The lawsuit states that at least one of Nightfall’s co-defendants — owners of high-end homes rented by the company — owns more than one short-term rental home in L.A., in violation of the law.

Moreover, the suit alleges that Jabli and his colleagues have turned the properties into rentable nightclubs, “bringing ‘excessive noise, traffic, obstruction of streets, service of alcohol to minors, public drunkenness, fights, disturbances of the peace, vandalism, and litter,’” in violation of the city’s Party House Ordinance.

According to the lawsuit, police gave the nickname “party cars” to the squad cars they devoted to handle the frequent complaints at Nightfall parties. The suit alleges that police have responded to more than 250 complaints about Nightfall party homes in the Hollywood area in the past two years.

The suit mentions two residents of the Hollywood Hills Bird Streets enclave who said music from a Nightfall party was so loud, it made their house shake. When they tried to exit their home, their driveway and street were blocked by partygoer traffic.

During a brief phone conversation with The Real Deal, Jabli denied the city attorney’s allegations.

As for unfair competition, the suit notes how Nightfall’s business model works with owners of multiple properties to turn them into lucrative short-term rentals.

“Nightfall is not just a booking service. Instead, Nightfall seeks to capture the front end of the business as well by entering into leases with homeowners that purport to entitle Nightfall, now as the ‘tenant,’ to sublet the property on a short-term basis,” the suit states. “Jabli himself submitted a declaration in an action relating to a dispute over the lease for the Donella Mansion where he stated that Nightfall made over $150,000 per month in profit from that one house, and that ‘property inventory is the lifeblood’ of Nightfall’s business. ‘

The city attorney’s suit demands that Jabli and his colleagues stop producing loud parties at short-term rentals. respect the city’s short-term rental rules and pay for court costs as well $2,500 for separate violations of city ordinances. If a judge rules in favor of the city, the court will determine the final sum owed by the defendant, a representative from the city attorney’s office said.

Jabli also is defending his company against lawsuits bought by property owners who were named in the city attorney’s suit.

In one such suit, 5554 Green Oak LLC sued Jabli in February for breach of contract and not paying rent on a Hollywood Hills home that was constructed in 2021. The plaintiff alleges that damages ratcheted up to more than $122,600 in lost rent, repairs and legal fees.