Real Estate & Propety Law

Tenants win $2M midtrial settlement with landlord over condition of apartment building

  • Print.

Nearly 100 tenants at trial against their former landlord reached a $2.18 million settlement on Thursday, four days into a trial that was expected to last about 12 days.

Their Los Angeles Superior Court suit alleged that in Franco Haiem’s apartment building between 2008 and 2012 there was breach of the implied warranty of habitability, premises liability, unlawful rent collection and intentional infliction of emotional distress by Bracha Investments LLC, according to City News Service, Courthouse News and the Los Angeles Times (sub. req.).

In addition to issues with broken heaters, exposed electrical wiring and plumbing, the 26-unit building had a massive cockroach infestation, witnesses testified.

Haiem said he had purchased hundreds of cans of Raid and said a number of tenants refused to cooperate with extermination efforts. He also said tenants often complained about conditions in the building as an excuse to avoid paying rent, Courthouse News reports.

“I was just one man, trying to do the best I can,” he said.

“Bracha and Franco Haiem did everything possible to repair and maintain the building,” defense attorney Kere Tickner of Bremer Whyte Brown & O’Meara told the jury.

Sharre Lotfollahi of Kirkland & Ellis, one of the lawyers representing tenants, said Haiem spent $26 per unit on repairs out of the approximately $770 per unit collected monthly in rent. The law firm worked with Inner City Law Center on the case.

She said the firms hope the settlement will serve as a warning to others, the Times reports.

“There are a lot of people out there in Los Angeles who have used this slum business model,” Lotfollahi said. “You buy a building, you put the least amount of money you can into it and you hope that the tenants keep quiet so you can take advantage of them.”

Give us feedback, share a story tip or update, or report an error.