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SLO to pay $18,000 in settlement over rental housing inspection program

The city of San Luis Obispo recently settled a lawsuit brought by a group representing landlords and tenants over the Rental Housing Inspection Ordinance.
The city of San Luis Obispo recently settled a lawsuit brought by a group representing landlords and tenants over the Rental Housing Inspection Ordinance. jjohnston@thetribunenews.com

The city of San Luis Obispo has agreed to pay $18,000 to settle a lawsuit filed by a group representing landlords and tenants opposed to a city rental housing inspection program, although the program is no longer in effect.

The lawsuit was filed by the San Luis Obispo Property and Business Owners Association, landlords Steve Barasch and Matt Kokkonen, along with their families, and Kevin P. Rice.

The ordinance, adopted in May 2015, subjected rental homes to routine city inspections to determine whether they conform to health and safety standards. The City Council, with a newly elected majority, repealed the ordinance in March after complaints that the program invaded tenant privacy and could reduce the supply of rental housing.

The lawsuit alleged the city policy violated the Fourth and Fifth Amendments of the United States Constitution by claiming a landlord can’t refuse consent of inspection if the unit is unoccupied without being subject to criminal penalties, adding it was “virtually impossible for the average citizen to determine what kind of penalty he or she can expect for withholding consent to an inspection.”

City Attorney Christine Dietrick said the City Council authorized the settlement, which admits no liability, “for less than the next steps in litigation were likely to cost.”

While the city says the claims were meritless, the plaintiffs called the settlement a “victory.”

“This is a victory for both tenants and landlords, for their privacy, for their safety, and for the protection of their property from unwarranted government intrusion,” Leslie Halls, president of the San Luis Obispo Property and Business Owners Association, said in a statement. “We commend the city of San Luis Obispo for settling this case rather than engaging in costly, protracted litigation … clearly the ordinance was not practical to enforce and had to be rescinded.”

This is a victory for both tenants and landlords, for their privacy, for their safety, and for the protection of their property from unwarranted government intrusion.

Leslie Halls, president of the San Luis Obispo Property and Business Owners Association

But Dietrick called the lawsuit “opportunistic and without merit,” adding that the council majority elected in November was new and repealed the ordinance largely based on constituent feedback, following through on their campaign promises.

Dietrick said the city settled the case after concluding that it was in the best interest of the city not to further “expend scarce public time and resources in defense of a program that no longer exists.”

“The city continues to disagree entirely with the allegations and legal conclusions asserted in the lawsuit, and continues to believe the lawsuit was opportunistic and without merit,” Dietrick said. “However, the reality is that the majority of the current council campaigned against the rental housing inspection program prior to the lawsuit ever being filed.”

The city continues to disagree entirely with the allegations and legal conclusions asserted in the lawsuit, and continues to believe the lawsuit was opportunistic and without merit.

Christine Dietrick, San Luis Obispo city attorney

Local attorney Saro Rizzo represented the plaintiffs.

Dietrick said the settlement doesn’t determine how the money is divided between the parties that brought the lawsuit. Halls said it will mostly cover attorney fees and court filing costs, with a small amount going back into the association’s coffers.

“To all of our members and friends who supported this significant effort, I say thank you for speaking up for our private property rights, which we felt were not respected,” Halls said in a statement.

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