Landlord Wins Hot Tub Time Machine Dispute - Property Law - California Case Law
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Landlord Wins Hot Tub Time Machine Dispute

There are unpleasant issues that come to mind with the phrase, “hot tub time machine.” First, there’s the epic cinematic failure, featuring John Cusack, which we unfortunately watched last year.

Second, there’s the first-world problem of landlords adjusting hot tub heating times in apartment buildings to save money, without passing those savings along to the tenants through rent reduction.

California’s Second Appellate District Court can only resolve one of those hot tub time machine issues, and, sadly, it is not the John Cusack one.

Santa Monica Properties (SMP) owns a 32-unit apartment building that is subject to the Santa Monica Rent Control Board's (RCB) jurisdiction. In 2008, two SMP tenants filed petitions for rent reduction, alleging that SMP had reduced housing services by changing the hours that the property's Jacuzzi was heated, (from 9:00 a.m. to 9:00 p.m., down to 5:00 p.m. to 9:00 p.m.), and by installing a sauna timer that reduced the length of time that the sauna would stay heated, (from one hour to 25 minutes).

After taking a year to issue a decision, the RCB decreased two tenants' rent based on their allegations.

SMP filed a petition for writ of administrative mandate challenging the rent reduction decision. The trial court sided with the RCB, and the appellate court reversed, in favor of SMP.

The Second Appellate District ruled that Santa Monica Rent Control Law 1805(e), as construed in Sterling v. Santa Monica Rent Control Bd., did not give RCB the authority to reduce rents based upon any decrease in service, particularly if the decrease had no effect on the adequacy of housing services or compliance with health and safety codes.

"Substantial deterioration," (i.e., breach of the implied warranty of habitability) or violations of housing, health and safety codes" are grounds for rent decreases, but the court ruled that "the minimal reduction of adult recreational services of a type commonly found only in luxury housing" did not warrant a rent reduction without evidence that the rent became excessive, or the landlord realized an unreasonable return on the investment in the property.

When evaluating whether or not to pursue a rent reduction claim on behalf of a client, keep in mind that Second Appellate District interprets Sterling as limiting rent reduction to variations in housing services, not changes in recreational amenities.

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