The California Supreme Court will decide a case involving the City of Los Angeles's inspection fee on apartments. In December, five of seven justices voted to grant the petition from Los Angeles, which lost a Second District Court of Appeal ruling on a lawsuit filed by apartment owners. (See CP&DR Legal Digest, October 1999.)
The Los Angeles City Council approved the $12 annual inspection fee on each of the city's approximately 750,000 apartments in July of 1998. The fee was intended to generate revenues for the city's renewed effort to fight slum housing. However, apartment owners quickly sued the city, alleging that Proposition 218 required voters to decide on what amounted to a $12 annual tax. The city argued that the fee was placed on a business — operation of rental units — and not on real property, so it was not subject to Proposition 218.
The city won at the trial court level, but a three-judge panel of the Second District reversed the decision. The appellate court said the fee was clearly a "fee or charge for property related service" and was therefore subject to Proposition 218. The fact that the city assessed only owners of rental units, and not all property owners, was irrelevant under Proposition 218, the court ruled.
The state Supreme Court has not yet set a date for oral arguments.
The case is Apartment Association of Los Angeles v. City of Los Angeles, No. B130243, 99 C.D.O.S. 7038, 1999 Daily Journal D.A.R. 8951, filed August 26, 1999.
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