Landlord Ordered To Pay Former Tenants, City $10 Million


LOS ANGELES (KNX 1070 NEWSRADIO)-- A landlord who engaged in a scheme to drive low- income tenants out of more than 800 rent-controlled apartments will have to pay $10 million to former residents and the city of Los Angeles, the City Attorney's Office announced today.

As owner of Landmark Equity Management, Darren Stern, also known as Henry Shalom, purchased rent-controlled buildings with high occupancy rates and then, through harassment, intimidation and substandard living conditions, forced tenants to leave, said City Attorney Rocky Delgadillo.

The goal was to evict tenants, raise rents and then sell the buildings for an inflated profit.

``Stern and his affiliates engaged in dozens of violations of state law through a number of illegal and unfair practices, including allowing properties to fall into disrepair and failing to remedy serious and extensive code violations,'' Delgadillo said.

Stern will have to pay $ 1 million in civil penalties and an estimated $9 million in restitution to former tenants in the Los Feliz, Hollywood, North Hollywood, East Los Angeles and Panorama City areas. The management company is also required to pay $105,000 to reimburse the city's investigative costs.

Stern is barred from purchasing any rental properties in the city of Los Angeles for four years and six months. Through the agreement with the City Attorney's Office, Stern could pay less than the required $9 million if he sells his properties in the next two years.

``He could potentially save money if he leaves the L.A. rental market, and we are hopeful that that happens,'' Delgadillo said.

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