The city of Los Angeles is expected to collect hundreds of thousands of dollars in fines after settling multiple lawsuits against the owners of illegal short-term rentals and party houses in the Hollywood area who were accused of wreaking havoc for neighboring residents.
“With excessive noise, disruptive behavior, obstruction of the public right of way, litter and vandalism, party houses are well-known to impact neighborhood quality and threaten public safety,” L.A. City Atty. Hydee Feldstein Soto said in a news release Tuesday.
Among the buildings mentioned in the settlement were the Franklin Apartments, a rent-stabilized building with 30 units located at 6871 Franklin Avenue. The city attorney’s office accused the building’s owner and manager of removing 10 long-term rental units for use as illegal short-term rentals.
In 2020, the 10 units were turned into an underground hotel, which “resulted in increased nuisance activity and complaints from other neighbors,” Soto said.
The law requires short-term rental properties to register with the city under the Home-Sharing Ordinance, or HSO. Rent-stabilized units, which limit a landlord on rent increases each year, are prohibited from being used for short-term rentals.
According to the city attorney, the property owners failed to register the units under HSO, and were taken off the market for extended periods of time.
The building’s owner and manager — MC Pico Properties LLC and Monem Corporation — were ordered to pay $150,000 in civil penalties, according to the city attorney’s office. As part of the settlement, the property managers must post signs acknowledging that short-term rentals are prohibited at that property and to return the 10 units to the long-term rental market.
“We will not tolerate party houses that disrupt our neighborhoods and threaten public safety, or sit back while our laws are violated and rent-stabilized housing is ripped off the market,” Soto said in a statement. “These actions send a clear message that we will hold those who violate our laws accountable for their violations.”
Soto also announced the settlement of a 2023 lawsuit filed by the city against Ultimate Host LLC, a high-end home hosting business known as the Nightfall Group. According to the lawsuit, police were called 250 times in a span of two years to multiple Hollywood properties operated illegally by Ultimate Host as party houses. Soto accused the Nightfall Group of being an alleged driver of the city’s party house problem.
According to the lawsuit, the owner, Mokhtar Jabli, operated the business illegally by renting out his main residence in violation of the city’s short-term-rental laws. Other property owners working with the Nightfall Group also leased their long-term rentals as short-term rentals for use as party houses, Soto said.
At least three defendants in this case settled — Kirill “Kirk” Ayzenberg, 5554 Green Oak LLC and Jungle Kerry — and were ordered to pay $215,000, $45,000 and $20,000 respectively in civil penalties, according to the city attorney’s office. As part of the settlement, they must tell all guests that loud and unruly parties are prohibited.
The city attorney’s office said litigation with other defendants is pending. The companies and property managers named in the lawsuits did not immediately respond to a request for comment Tuesday.