July 2, 2025 Breaking News, Latest News, and Videos

Santa Monica Sues Real Estate Firm for Converting Rent-Controlled Units Into Vacation Rentals

City of Santa Monica files complaint against NMS Properties Corporation 

By Sam Catanzaro

Santa Monica is suing a real estate corporation for converting a rent-controlled apartment building into alleged illegal vacation rentals. 

In a lawsuit filed on September 28, 2021, the Santa Monica Rent Control Board and the City of Santa Monica allege that since 2018 NMS Properties, Inc. and its affiliates have violated and continue to violate the state Ellis Act and local Rent Control regulations, as well as laws intended to protect long-term tenants and preserve the City’s affordable housing stock. The lawsuit alleges that the owners and managers of the residential rental property at 1242 10th Street, including WMNS Communities, LLC and NMS Properties, Inc., unlawfully converted what had once been a rent-controlled 10-unit multi-family residential apartment building with stable, long-term tenants, into a building that is now used for unlawful vacation rentals and other unlawful rental activity.

The complaint alleges that in 2015 the defendant owners bought the properties at 1238 and 1242 10th Street and started renovations with the purpose of upgrading the units for future market rate rentals, with modern kitchen appliances, in-unit washer/dryers, smart technologies and more. In addition, the The complaint claims that the dangerous conditions created by the extensive construction drove many tenants out of the building. 

The lawsuit further alleges that when the last three tenants at 1242 10th Street refused to leave or be bought-out, the owners invoked the Ellis Act as a mechanism to remove them from their rent-controlled units but did not leave the residential rental business as required. 

“The purpose of the Ellis Act is to allow landlords, who intend to get out of the rental business, to evict tenants who would otherwise have a right to remain in their homes. It is not designed as a means of evading rent control by driving out long-term tenants in order to command higher, market rental rates,” said Alison Regan, General Counsel for the Santa Monica Rent Control Board.

The complaint alleges that after invoking the Ellis Act, the owners placed ads on sites such as apartments.com, westsiderentals.com, and mysuite.com, which advertised the units as fully furnished and available for rent. According to a Rent Control Board investigator who visited the property in December 2018, a month after the units were considered withdrawn from the rental market, the units had been “recently renovated and staged for occupancy.”

“The Board and City allege that the owners and managers engaged in additional unlawful acts to conceal the unauthorized and unpermitted rental activity, including lying to City staff, submitting false and misleading applications to the City, and using the units to host unpermitted and illegal short-term rental activity.  The City, on behalf of the People of State of California, has further alleged that the defendants engaged in unlawful, fraudulent, and deceptive acts and practices in violation of the state’s Unfair Competition Law. The plaintiffs are seeking a wide range of remedies, including monetary and injunctive relief,” the City said in a press release announcing the lawsuit. 

NMS Properties could not immediately be reached for comment regarding the lawsuit.

<>Related Posts

People are Using Palisades for “Disaster Tours.” Local Officials Are Trying to Stop Them

July 1, 2025

July 1, 2025

A new motion introduced to City Council requests a coordinated strategy from LADOT, the Los Angeles Police Department, and the...

Santa Monica Favorite Esters Rebrands as Esters Wine Shop & Oyster Bar

June 30, 2025

June 30, 2025

New Concept Launches With French-Spanish Flair and Free Bubbles Esters Wine Shop, the fave Parisian-style wine bar in downtown Santa...

Letter to the Editor: Santa Monica’s Great Park: It’s Time to Deliver on 100 Years of Promise

June 30, 2025

June 30, 2025

Santa Monica stands at the edge of history. For nearly a century, residents have consistently supported turning the airport land...

Why Nordstrom Says It’s Closing Its Santa Monica Place Location

June 30, 2025

June 30, 2025

A Nordstrom spokesperson explained the closure as a strategic realignment Nordstrom confirmed its decision to close its Santa Monica store...

Three-Bed Palisades Highlands Townhouse Hits Market for $1.7M

June 30, 2025

June 30, 2025

The Mediterranean-style property, located at 1529 Michael Lane, is part of a 71-unit community A remodeled 1,919-square-foot townhouse in the...

Six-Bed Mar Vista Hilltop Home Under Construction Lists for $5.3M

June 30, 2025

June 30, 2025

The private backyard is complete with a pool, spa, fire pit, built-in BBQ, and areas for outdoor dining A stunning...

(Video) Getty Villa Reopens Six Months After Dodging Destruction of Palisades Wildfires

June 29, 2025

June 29, 2025

With the reopening also comes a new exhibit, “The Kingdom of Pylos” Getty Villa Reopens Six Months After Dodging Destruction...

Free Virtual Planetarium Shows Coming to SMC in July

June 29, 2025

June 29, 2025

The virtual format is in place as construction of the new SMC Planetarium and Observatory nears completion The Santa Monica...

Santa Monica Adopts $793.3M Budget for FY25-27, Prioritizing Housing and Safety

June 29, 2025

June 29, 2025

The budget preserves core services and invests in major projects, including over $1 billion in hotel investments The Santa Monica...

Iranian Pastor in West L.A. Speaks as Church Rocked by Immigration Raids 

June 28, 2025

June 28, 2025

Five Detained as Fear Spreads Through Persian Christian Faith Community  Fear has spread through a West Los Angeles congregation after...

California Doubles Down on Hollywood: $750M in Tax Credits Approved for Film and TV Industry

June 28, 2025

June 28, 2025

State Lawmakers Back Major Expansion of Production Incentives, Raising Job Projections Los Angeles’ film and television industry is poised to...

Park: “Our Water Infrastructure Must Be Emergency-Ready Every Day”

June 28, 2025

June 28, 2025

Councilwoman expressed cautious relief at the news but emphasized the need for robust infrastructure The Los Angeles Department of Water...

Washington Square Pizza Opens to the Public

June 28, 2025

June 28, 2025

New York Style Pizza “By-The-Slice” Now at the Beach By Nick Antonicello  Washington Square Pizza formally opened its doors today...

California Allocates $5B for Road Repairs, Transit Expansion

June 28, 2025

June 28, 2025

The funding aims to improve road safety, reduce traffic congestion, and promote cleaner transportation California is investing nearly $5 billion...

THIS SUNDAY: Palisades Symphony Presents “Best of Broadway”

June 28, 2025

June 28, 2025

The performance will feature a full orchestra playing iconic selections, from John Philip Sousa’s *El Capitan* and George Gershwin’s *The...