Filed 10/22/14

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

BURIEN, LLC,

Plaintiff and Appellant,

v.

JAMES A. WILEY,

Defendant and Respondent.

 B250182

 (Los Angeles County Super. Ct. 

 No. SC114545)

APPEAL from a judgment of the Superior Court of Los Angeles, Gerald 

Rosenberg, Judge. Affirmed. 

Dennis P. Block & Associates, Dennis P. Block, Daniel Costas, for Plaintiff and 

Appellant. 

Campbell & Farahani, Frances M. Campbell, Nima Farahani, for Defendant and 

Respondent. 

________________________________
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A landlord converted a rent-controlled apartment building to condominiums, 

obtained a new certificate of occupancy in 2009 based on the change in use, and raised 

the rent. When a tenant objected, the landlord sought a declaration from the court that the 

unit was exempt from local rent control ordinances under the Costa-Hawkins Rental 

Housing Act (Civ. Code, § 1954.50, et seq.).

1

 The trial court found the unit was not 

exempt and entered judgment in favor of the tenant. On appeal, the landlord contends the 

unit is exempt from rent control under section 1954.52, subdivision (a)(1), which 

provides an exemption for units that have a certificate of occupancy issued after 1995. 

We conclude section 1954.52, subdivision (a)(1), refers to certificates of occupancy 

issued prior to residential use of the unit. We affirm.

FACTS AND PROCEDURAL HISTORY

A certificate of occupancy was issued in 1972 for the apartment building at issue 

on Sawtelle Boulevard in Los Angeles, California. Defendant and respondent James A. 

Wiley (Tenant) leased a unit in the building in 1981. Tenant’s rent was controlled by the 

Los Angeles Rent Stabilization Ordinance (Los Angeles Mun. Code, § 151.00 et seq.) 

(LARSO). The Costa-Hawkins Rental Housing Act, effective January 1, 1996, exempted 

certain units from local rent control ordinances, including units with a certificate of 

occupancy issued after 1995 and condominiums meeting certain conditions.

Plaintiff and appellant Burien, LLC (Landlord) purchased the building. Landlord 

converted the building to condominiums and obtained a new certificate of occupancy in 

2009 based on the change of use from apartments to condominiums. On March 17, 2011, 

Landlord served Tenant with a 60-day notice of change of terms of tenancy stating the 

rent would be increased from $1,401 to $3,000 per month. Tenant refused to pay the 

 

1 All further statutory references are to the Civil Code, unless otherwise stated.
3

increased amount. The Los Angeles Housing Department sent a letter to Landlord stating 

the attempted rent increase violated LARSO. The Housing Department referred the 

matter to the City Attorney’s Office for further proceedings. 

On October 19, 2011, Landlord filed a complaint against Tenant for declaratory 

relief and intentional interference with prospective economic advantage. A bench trial 

was held on June 25, 2013. The trial court concluded the rent increase violated LARSO. 

Landlord filed a premature notice of appeal from the ruling. The court entered judgment 

in favor of Tenant on July 22, 2013. In the interests of justice, we treat the notice of 

appeal as filed immediately after entry of the July 22, 2013 judgment. (Cal. Rules of 

Court, rule 8.104(d)(2).)

DISCUSSION

Standard of Review and Principles of Statutory Interpretation

The interpretation of a state statute presents a question of law, which we review de 

novo. (Apartment Assn. of Los Angeles County, Inc. v. City of Los Angeles (2009) 173 

Cal.App.4th 13, 21.) Well-established rules govern construction of a statute. Our 

primary task is to determine the intent of the legislative body, so as to construe the statute 

to effectuate that purpose. (Doe v. Brown (2009) 177 Cal.App.4th 408, 417.) We begin 

with the words of the statute. (Ibid.) “Words used in a statute or constitutional provision 

should be given the meaning they bear in ordinary use. [Citations.] If the language is 

clear and unambiguous there is no need for construction, nor is it necessary to resort to 

indicia of the intent of the Legislature . . . . [Citations.]” (Lungren v. Deukmejian (1988) 

45 Cal.3d 727, 735.)

But the court is not prohibited “from determining whether the literal meaning of a 

statute comports with its purpose or whether such a construction of one provision is 

consistent with other provisions of the statute. The meaning of a statute may not be 

determined from a single word or sentence; the words must be construed in context, and 
4

provisions relating to the same subject matter must be harmonized to the extent possible. 

[Citation.] Literal construction should not prevail if it is contrary to the legislative intent 

apparent in the statute. The intent prevails over the letter, and the letter will, if possible, 

be so read as to conform to the spirit of the act. [Citations.] An interpretation that 

renders related provisions nugatory must be avoided [citation]; each sentence must be 

read not in isolation but in the light of the statutory scheme [citation]; and if a statute is 

amenable to two alternative interpretations, the one that leads to the more reasonable 

result will be followed [citation.].” (Lungren v. Deukmejian, supra, 45 Cal.3d at p. 735.)

“If . . . the statutory language is ambiguous or reasonably susceptible to more than 

one interpretation, we will ‘examine the context in which the language appears, adopting 

the construction that best harmonizes the statute internally and with related statutes,’ and 

we can ‘“‘look to a variety of extrinsic aids, including the ostensible objects to be 

achieved, the evils to be remedied, the legislative history, public policy, 

contemporaneous administrative construction, and the statutory scheme of which the 

statute is a part.’”’ [Citation.]” (Pacific Sunwear of California, Inc. v. Olaes Enterprises, 

Inc. (2008) 167 Cal.App.4th 466, 474.)

“‘We must select the construction that comports most closely with the apparent 

intent of the Legislature, with a view to promoting rather than defeating the general 

purpose of the statute, and avoid an interpretation that would lead to absurd 

consequences.’ [Citation.]” (Realmuto v. Gagnard (2003) 110 Cal.App.4th 193, 199.) 

“We presume that the Legislature, when enacting a statute, was aware of existing related 

laws and intended to maintain a consistent body of rules. [Citation.]” (Manhattan Loft, 

LLC v. Mercury Liquors, Inc. (2009) 173 Cal.App.4th 1040, 1056.)

Exemption Based on Certificate of Occupancy

Landlord contends Tenant’s unit is exempt from rent control under section 

1954.52, subdivision (a)(1), because a certificate of occupancy was issued for the unit 

after February 1, 1995. Tenant contends the exemption refers to the first certificate of 
5

occupancy issued for the unit, and does not apply in this case, because his tenancy was 

established long before the new certificate of occupancy. We conclude the language of 

subdivision (a)(1), standing alone, is susceptible to both parties’ constructions, but 

reading the section as a whole, the exemption can only apply to certificates of occupancy 

that precede residential use of the unit.

Section 1954.52, subdivision (a), provides three exemptions from local rent 

control laws, any of which allow an owner to establish the initial and subsequent rental 

rates for a unit.2 The first exemption is for a unit that has “a certificate of occupancy 

issued after February 1, 1995.” (§ 1954.52, subd. (a)(1).) The second exemption is for 

 

2 Section 1954.52, subdivision (a), as originally enacted, provided: 

“Notwithstanding any other provision of law, an owner of residential real property may 

establish the initial and all subsequent rental rates for a dwelling or unit about which any 

of the following is true: [¶] (1) It has a certificate of occupancy issued after February 1, 

1995. [¶] (2) It has already been exempt from the residential rent control ordinance of a 

public entity on or before February 1, 1995, pursuant to a local exemption for newly 

constructed units. [¶] (3) It is alienable separate from the title to any other dwelling unit 

or is a subdivided interest in a subdivision as specified in subdivision (b), (d), or (f) of 

Section 11004.5 of the Business and Professions Code. This paragraph shall not apply to 

a dwelling or unit where the preceding tenancy has been terminated by the owner by 

notice pursuant to Section 1946 or has been terminated upon a change in the terms of the 

tenancy noticed pursuant to Section 827. [¶] Where a dwelling or unit in which the 

initial or subsequent rental rates are controlled by an ordinance or charter provision in 

effect on January 1, 1995, the following shall apply: [¶] (A) An owner of real property 

as described in this paragraph may establish the initial and all subsequent rental rates for 

all existing and new tenancies in effect on or after January 1, 1999, if the tenancy in 

effect on or after January 1, 1999, was created between January 1, 1996, and December 

31, 1998. [¶] (B) Commencing on January 1, 1999, an owner of real property as 

described in this paragraph may establish the initial and all subsequent rental rates for all 

new tenancies if the previous tenancy was in effect on December 31, 1995. [¶] (C) The 

initial rental rate for a dwelling or unit as described in this paragraph in which the initial 

rental rate is controlled by an ordinance or charter provision in effect on January 1, 1995, 

may not, until January 1, 1999, exceed the amount calculated pursuant to subdivision (c) 

of Section 1954.53. An owner of residential real property as described in this paragraph 

may, until January 1, 1999, establish the initial rental rate for a dwelling or unit only 

where the tenant has voluntarily vacated, abandoned, or been evicted pursuant to 

paragraph (2) of Section 1161 of the Code of Civil Procedure.”
6

units already exempt from rent control “pursuant to a local exemption for newly 

constructed units.” (§ 1954.52, subd. (a)(2).) The third exemption is for a unit that is

“alienable separate from the title to any other dwelling unit or is a subdivided interest in 

[a community apartment project, a stock cooperative project, or a limited equity housing 

cooperative].” (§ 1954.52, subd. (a)(3).) Condominium units are included in the third 

exemption, because they are alienable separate from the title to any other dwelling unit. 

The third exemption does not apply if the prior tenancy terminated because the landlord 

served a notice of termination or a change in the tenancy’s terms.

Effective January 1, 2002, the Legislature amended the third exemption for 

condominium units to exclude “[a] condominium dwelling or unit that has not been sold 

separately by the subdivider to a bona fide purchaser for value . . . . However, if a 

condominium dwelling or unit meets the criteria of paragraph (1) or (2) of subdivision 

(a), or if all the dwellings or units except one have been sold separately by the subdivider 

to bona fide purchasers for value, and the subdivider has occupied that remaining unsold 

condominium dwelling or unit as his or her principal residence for at least one year after 

the subdivision occurred, then subparagraph (A) of paragraph (3) shall apply to that 

unsold condominium dwelling or unit.” (§ 1954.52, subd. (a)(3)(B)(ii).)3

 

3 Section 1954.52, subdivision (a), currently provides: “Notwithstanding any 

other provision of law, an owner of residential real property may establish the initial and 

all subsequent rental rates for a dwelling or a unit about which any of the following is 

true: [¶] (1) It has a certificate of occupancy issued after February 1, 1995. [¶] (2) It 

has already been exempt from the residential rent control ordinance of a public entity on 

or before February 1, 1995, pursuant to a local exemption for newly constructed units. 

[¶] (3)(A) It is alienable separate from the title to any other dwelling unit or is a 

subdivided interest in a subdivision, as specified in subdivision (b), (d), or (f) of Section 

11004.5 of the Business and Professions Code. [¶] (B) This paragraph does not apply to 

either of the following: [¶] (i) A dwelling or unit where the preceding tenancy has been 

terminated by the owner by notice pursuant to Section 1946.1 or has been terminated 

upon a change in the terms of the tenancy noticed pursuant to Section 827. [¶] (ii) A 

condominium dwelling or unit that has not been sold separately by the subdivider to a 

bona fide purchaser for value. The initial rent amount of the unit for purposes of this 

chapter shall be the lawful rent in effect on May 7, 2001, unless the rent amount is 

governed by a different provision of this chapter. However, if a condominium dwelling or 
7

The legislative history of the amendment is instructive. As explained in the 

analysis by the Assembly Committee on the Judiciary on Senate Bill No. 985 (2001-2002 

Reg. Sess.) as amended May 17, 2001, at pages 5-6: “According to the sponsors, this 

amendment is necessary to close a loophole in law that allows landlords to avoid local 

rent control laws. The exemption was originally created to spur construction of 

condominiums, seen as an affordable housing alternative, and in recognition that 

condominiums were built with the same purpose as apartment units. [¶] However, the 

language was broadly written and, as a consequence, some apartment property owners 

have taken advantage of the law by obtaining a permit to convert to condominiums, but 

never completing the process. In the meanwhile, the property owners continue to rent the 

apartment units, free from local rent controls because of the Costa-Hawkins exemption. 

In some cases, proponents assert, the condo-conversion permits were pulled up to eight 

years ago, but the owners are still renting the unit to tenants. This bill would close that 

 

unit meets the criteria of paragraph (1) or (2) of subdivision (a), or if all the dwellings or

units except one have been sold separately by the subdivider to bona fide purchasers for 

value, and the subdivider has occupied that remaining unsold condominium dwelling or 

unit as his or her principal residence for at least one year after the subdivision occurred, 

then subparagraph (A) of paragraph (3) shall apply to that unsold condominium dwelling 

or unit. [¶] (C) Where a dwelling or unit in which the initial or subsequent rental rates 

are controlled by an ordinance or charter provision in effect on January 1, 1995, the 

following shall apply: [¶] (i) An owner of real property as described in this paragraph 

may establish the initial and all subsequent rental rates for all existing and new tenancies 

in effect on or after January 1, 1999, if the tenancy in effect on or after January 1, 1999, 

was created between January 1, 1996, and December 31, 1998. [¶] (ii) Commencing on 

January 1, 1999, an owner of real property as described in this paragraph may establish 

the initial and all subsequent rental rates for all new tenancies if the previous tenancy was 

in effect on December 31, 1995. [¶] (iii) The initial rental rate for a dwelling or unit as 

described in this paragraph in which the initial rental rate is controlled by an ordinance or 

charter provision in effect on January 1, 1995, may not, until January 1, 1999, exceed the 

amount calculated pursuant to subdivision (c) of Section 1954.53. An owner of 

residential real property as described in this paragraph may, until January 1, 1999, 

establish the initial rental rate for a dwelling or unit only where the tenant has voluntarily 

vacated, abandoned, or been evicted pursuant to paragraph (2) of Section 1161 of the 

Code of Civil Procedure.”
8

loophole and provide that the exemption would apply only when the unit is sold 

separately to a bona fide purchaser for value. Thus, apartment units that have remained 

rentals would be subject to local rent control laws.”

“After the Legislature passed the bill and sent it to Governor Davis for signature, 

its author (Senator Sheila James Kuehl) wrote the governor: ‘[T]he bill closes a loophole 

in Costa-Hawkins that allows landlords to . . . raise rents by falsely “preparing” to 

convert a rental unit to a condominium. Under [Senate Bill] 985, in cities that have rent 

control, the landlord would be required to actually sell a unit, rather than merely initiate 

the conversion paperwork, in order to have rent controls removed.’” (City of West 

Hollywood v. 1112 Investment Co. (2003) 105 Cal.App.4th 1134, 1144.)

When a building is constructed, added on to, or altered, a certificate of occupancy 

is generated at the conclusion of all inspections to certify that the building meets local 

building code requirements for occupancy. A common sense interpretation of section 

1954.52, subdivision (a)(1), is that it excludes buildings from rent control that are 

certified for occupancy after February 1, 1995. Buildings that were certified for 

occupancy prior to February 1, 1995, are not excluded. This interpretation furthers the 

purpose of the exemption by encouraging construction and conversion of buildings which 

add to the residential housing supply. In this case, because Landlord’s building was 

certified for occupancy long before February 1, 1995, it is not excluded from rent control.

Landlord, reading subdivision (a)(1) in isolation, contends the plain language does 

not limit the exemption to the initial certificate of occupancy and instead applies broadly 

to any certificate of occupancy issued after February 1, 1995. Although the language is 

susceptible to this construction, the result does not further the purpose of the statute. A 

certificate of occupancy based solely on a change in use from one type of residential 

housing to another does not enlarge the supply of housing. 

Landlord’s construction would also render the exclusion of certain condominium 

units in subdivision (a)(3) nugatory. In 2002, in order to curb abuse of section 1954.52 

through false condominium conversions, the Legislature carefully excluded

condominium units which have not been sold separately to a bona fide purchaser. If a 
9

certificate of occupancy issued after February 1, 1995, based on a change in use from 

apartments to condominiums triggers the exemption under subdivision (a)(1), there 

would never be a determination under subdivision (a)(3) of whether the unit was sold 

separately to a bona fide purchaser. A unit would always qualify for the exemption under 

subdivision (a)(1) based on the new certificate of occupancy. Interpreting section 

1954.52, subdivision (a)(1) to apply to any certificate of occupancy issued after 1995 

would circumvent the tenant protection enacted by the Legislature under subdivision 

(a)(3) for buildings converted to condominiums. Landlord’s suggestion that tenant 

protection created in 2002 applies only to condominium conversions initiated prior to the 

effective date of the original statute more than seven years earlier is untenable. The 

Legislature amended section 1954.52 to remedy an abuse that was permissible under the 

broad language of the original statute. The plain language and intent of the provision is 

to provide protection to tenants in condominium conversions from the effective date of 

the legislation into the future.

Similar exemptions in local rent control ordinances encourage the creation of new 

residential housing. For example, LARSO exempts housing from rent control if the first 

certificate of occupancy was issued after October 1, 1978, unless the building was first 

occupied for residential purposes prior to October 1, 1978. It states in pertinent part: 

“Housing accommodations, located in a structure for which the first Certificate of 

Occupancy was issued after October 1, 1978, are exempt from provisions of this Chapter. 

If the property was occupied for residential purposes prior to October 1, 1978, and a 

Certificate of Occupancy for the subject building was never issued or was not issued until 

after October 1, 1978, the housing accommodation shall be subject to the provisions of 

this Chapter if relevant documentation, such as a building permit, establishes that the 

building was first occupied for residential purposes prior to October 1, 1978.” (Los 

Angeles Mun. Code, § 151.02.)

The City of Oakland’s Residential Rent Adjustment Program provides a similar 

exemption from rent control: “Dwelling units which were newly constructed and 

received a certificate of occupancy on or after January 1, 1983. This exemption does not 
10

apply to any newly constructed dwelling units that replace covered units withdrawn from 

the rental market in accordance with O.M.C. 8.22.400, et seq. (Ellis Act Ordinance). To 

qualify as a newly constructed dwelling unit, the dwelling unit must be entirely newly 

constructed or created from space that was formerly entirely non-residential.” (Oakland 

Mun. Code, § 8.22.030, subd. (A)(5).)

In Da Vinci Group v. San Francisco Residential Rent etc. Bd. (1992) 5 

Cal.App.4th 24 (Da Vinci), the appellate court considered the scope of the exemption 

under San Francisco’s Residential Rent Stabilization and Arbitration Ordinance. The San 

Francisco ordinance exempts “[r]ental units located in a structure for which a certificate 

of occupancy was first issued after the effective date of this ordinance [in 1979.]” (S.F. 

Admin. Code, ch. 37, § 37.2, subd. (r)(5).) In Da Vinci, a commercial warehouse built in 

1905 was used residentially beginning in 1980, renovated, and granted a certificate of 

occupancy in 1986. The local rent control board interpreted the rent control exemption to 

apply only to newly constructed rental units, or converted warehouses with new 

certificates of occupancy when there had been no prior residential use. The Da Vinci 

court concluded the board’s interpretation was consistent with the “goal of easing the 

housing shortage by encouraging creation of new residential rental units where there were 

none before.” (Da Vinci, supra, at p. 30.) The certificate of occupancy for the 

warehouse property created legal residential units from existing residential use, but did 

not enlarge the city’s available housing. (Ibid.) The units did not qualify for the 

exemption, because they “were not newly constructed, nor was the building restructured 

to permit new residential use.” (Ibid.)

In this case, Tenant’s unit is not exempt under subdivision (a)(1) of section 

1954.52, because Tenant occupied the unit prior to the issuance of the 2009 certificate of 

occupancy. The 2009 certificate of occupancy did not precede the residential use of the 

property. The trial court properly determined Tenant’s unit was subject to rent control 

and not exempt. We affirm the judgment.
11

DISPOSITION

The judgment is affirmed. Respondent James A. Wiley is awarded his costs on 

appeal.

KRIEGLER, J. 

We concur: 

TURNER, P. J.

MOSK, J.