Tenants Fight Back After New Landlord Sends Eviction Notices

Update (August 8, 12:57 p.m.): Because the tenants did not pay the court fees, the case was dismissed, but Wagner said he intends to re-file the lawsuit.

Original Story (July 22, 7:58 a.m.): A group of low-income renters, including a wheelchair-bound 84-year-old woman, were told to get out of their apartments by Aug. 15, prompting a lawsuit against the landlord.

Nestled between graphic-shirt shops in one of Newport Beach’s tourist hubs, an old set of stairs leads to a dinky apartment complex with 12 rooms, each approximately 212 square feet. Newport Beach Co. LP, which bought the complex in May, issued 60-day eviction notices to every tenant in the building in June.

Carol Masterson has lived in an apartment on 305 1/2 Main St. for 26 years. She says the location is ideal for her because of the many nearby restaurants she can access with her wheelchair or have other people get food for her.

When asked where she could go if evicted, Masterson, whose windows face Newport Harbor, became very quiet. “I don’t know,” she whispered between tears. “Homeless.”

Jonathan Wagner is suing Chris Renard, Newport Beach Co.’s agent, for the reinstatement of his lease and $10,000. In court filings, Wagner said he reached that number by combining two months’ average rent for a studio apartment in Newport Beach (totaling $3,000), then adding $7,000 for distress he allegedly suffered because of the eviction notice.

On documents submitted to the courts, Keith Costanza claimed every tenant would be forced into homelessness if evicted.

According to Costanza, Renard has never visited the property and operated through Christine Lujan, whom Masterson said told them Newport Beach Co. had no plans to evict anyone just days before the renters received the notices. “[Lujan] came in here, sat in that chair and lied like crazy to me,” Masterson said. 

Both Lujan and Renard did not respond to multiple requests for comment.

In his biography for Commercial Realty Consultants, a business he co-founded, Renard says he “played a critical role in the purchasing, financing, renovating, managing and selling of many properties throughout the Western United States. . . . Many of the properties he turned around were initially mismanaged, which resulted in high vacancy, substandard tenant mix and in need for rehabilitation.”

Costanza said he believes that after evicting all the tenants, Renard plans to use the property for Airbnb rentals. But the apartments are in a commercially zoned area, and according to the city of Newport Beach, converting commercially zoned property into an Airbnb space is illegal. 

“This is our home. They have no right to just come in here, and because they want to make a quick buck off Airbnb . . . to retaliate against us,” Costanza said. “My impression is that their plan is to kick us out and do Airbnb and just ignore what the city says.”

According to court documents submitted by Wagner, Renard intends to rent out the apartments as Airbnb rooms; retaliate against the tenants for investigating his businesses as well as maintenance complaints; and avoid the September deadline of the retroactive state Assembly Bill 1482. If AB 1482 makes it through the California legislature and Governor Gavin Newsom signs it, Renard would not be able to evict the tenants in the manner he did because the bill is retroactive, reaching as far back as March 15.

Largely considered a rent-control law, AB 1482 features a provision that bans landlords from evicting tenants without specifying a reason, something Renard did not do. The bill would also require landlords to allow tenants time to correct evictable behavior, if it’s why the eviction notice was issued. For no-fault evictions, the landlord must provide one month’s rent to the tenant to help them relocate.

On the certificate of limited partnership paperwork for Newport Beach Co., Renard lists another of his companies, Excell Investment Group, as a general partner. Costanza says he found that detail suspicious and reported Renard to the California Attorney General’s office, which six-year resident Mike White said irritated Renard enough to retaliate against the renters.

“You’re supposed to have your name and a partner on this to fill this out,” White says. “Excell Investment Group is also his company. He’s putting his name twice on this.”

According to Wagner, the tenants set up an arbitration meeting, but Renard did not show.

Since retaliation can be difficult to prove, the tenants have a potentially arduous battle ahead of them in court, according to Alexander Harnden, a policy advocate with the Western Center on Law and Poverty.

“It can be fairly difficult for tenants to make a case for retaliation because the court would look at whether the landlord has some valid reason for evicting the tenants,” Harnden said. “If the tenants have made an official complaint about a code violation or a public health concern, they’re able to use that complaint as basically evidence and their presumption that the landlord is retaliating against them if they evict them within a certain time of making that complaint.”

In court filings, Wagner specified that the tenants had repeatedly contacted Newport Beach Co. over maintenance issues, AB 1482 and Airbnb laws on May 24, and they all received eviction notices the next month.

Inside the building, many renters share a bathroom, as some rooms do not have one of their own. “There’s wires hanging everywhere. It’s really not up to code at all,” Costanza said, referring to the maintenance complaints. “They don’t address them; they don’t do anything at all. There’s cockroaches everywhere.”

Costanza, who hopes to keep the battle in small-claims court because the renters cannot afford a lawyer, maintains that Renard could easily outspend them and hire an expensive defense lawyer to take the matter to trial, which could kill the tenants’ case.

Forcing them out in the middle of the summer is particularly absurd, according to White. “I’m freaking out,” he said. “Anybody who’s been down here for any period of time knows you don’t try and move in August. It’s totally thronged with tourists—nowhere to park.”

White added that while he might not be made homeless by the eviction, he will have to move to parts of Orange County with cheaper rents and higher crime.

If AB 1482 passes, the tenants plan to collectively sue Renard in early September, according to Costanza.

“I figured I’d die in this chair,” Masterson said. “In this apartment, I’ve done everything myself. I’ve paid and everything; I’ve never asked them for a dime.”