OWNER’S REAP BILL OF RIGHTS
The Los Angeles Rent Escrow Account program is designed to confiscate your rents and give your money to the City. It is difficult to believe, but the City can send you only one notice letter, and whether you receive the letter or not, (maybe you were on vacation) the City can confiscate 100% of your rental income on the first day of the next month, and every month thereafter.
This has happened to hundreds of owners – it is not theoretical. Many are in
foreclosure or bankruptcy.
The REAP notice is usually preceded by an inspection where deficiencies
were found with your building, no matter how minor or cosmetic ( eg. scratched
paint). If the defects are not fixed in a timely manner, you will get the REAP notice
HOW TO RESPOND TO THE REAP LETTER
Many owners read the REAP letter, which states a hearing will be scheduled
(or is scheduled), and assume they can wait until the hearing and present their
THIS IS WRONG!
The REAP letter contains an appeal form which must be filed by a deadline date, 15 days after the REAP letter is dated. You must timely file the appeal, on the city mandated form, or your rents will be automatically confiscated.
HOW DO I FILE THE APPEAL?
If you mail the appeal form and it is not received by the Housing department
by the 15th day, you will be put in REAP and your rents will be confiscated. Note
that you have already lost several days because the City mailed the REAP notice to
The safest course is to deliver your appeal to the Housing Department at one
of their six addresses listed on the letter. Beware if you wait until the last day- the
Housing offices close early (at 4:00p.m.), and some of the offices listed in the letter
WHAT SHOULD THE APPEAL SAY?
First, use the City form. An owner who used a slightly different form had his
building put in REAP. Make your appeal as detailed as possible. Be sure to include
the required tenant information. The City has argued that you cannot later raise any
issue in Court that you failed to raise in your initial appeal. You may want to consult
an attorney regarding your appeal.
WHAT IF I AM IN COMPLIANCE?
You still have to file an appeal. Your building will be put in REAP even if you
are 100% in compliance, if you fail to file an appeal.
OK, I FILED AN APPEAL, WHAT DO I SAY AT THE HEARING?
The Hearing Examiner is a phony judge, without a law degree – she is a mere
Housing Department employee. She wears judicial robes to intimidate you. She
favors her employer, the Housing Department. Unfortunately, this bureaucrat makes
the decisions. The first question she will ask is whether you are in compliance.
Although the Hearing Examiner is required to take evidence from you, she
pays little attention to it. She will be dismissive of your witnesses and photographs.
She will complain that you took too long to repair your building.
The Hearing Examiner is only interested in what the inspector has to say.
Therefore, BEFORE the hearing, call the inspector and get everything signed off as
in compliance. If you do so, you will probably avoid REAP (provided you filed an
I COULD NOT REPAIR EVERYTHING BEFORE THE HEARING,
WHAT DO I DO?
Many times, additional time is needed to do repairs. Many times this is the
result of a City delay ( eg. finalizing permits). Sometimes new defects are alleged for
the first time at the Hearing. Often the tenants continually damage the building (e.g.
tampering with smoke detectors). Always ask for a continuance to comply. If the
continuance is granted, fix your building before the continued hearing. Also
remember that some so called “defects” are actually grandfathered in, and are not
defects at all (especially some electrical items).
THE HEARING EXAMINER PUT MY BUILDING IN REAP AND MY NEXT MONTHS (AND ALL FOLLWING MONTHS) RENTS
WILL BE CONFISCATED.
WHAT DO I DO?
You have a very short time period (10 days) to file another (second) appeal.
File it in person, and pay the $150.00 filing fee. This second appeal must state
detailed reasons why the Hearing Examiner was in error (you may want to consult
an attorney). If you properly and timely file an appeal, the rent confiscation will be
stayed (stopped) until the RAC Appeal hearing. At the present time, RAC appeal
hearings are heard approximately 5 months after filing.
WHAT DO I DO WHILE I AM AWAITING MY APPEAL HEARING?
Many owners wrongfully assume that the RAC Appeal Board will reverse the
Hearing Examiner’s decision to put the building in REAP. That almost never
happens. It does not matter if you are in compliance. Instead, use the time to get out
of REAP. That means you must get signed off by the Housing Department, Building
Department, Fire Department, Health Department, a Tenant Organization, and the
City Council, all before the RAC Appeal hearing.
Thomas A. Nitti, Attorney
1250 Sixth St, Suite 205
Santa Monica, CA. 90401