Los Angeles Superior Court Appellate Division Issues Opinion Holding That A Notice to Pay Rent or Quit Cannot Include SCEP Fees
On January 24, 2025, the Appellate Division of the Superior Court of Los Angeles held in Heffesse v. Guevara (2025 WL 547001) that Systematic Code Enforcement Program (SCEP) fees are not “rent” within the meaning of the Los Angeles Rent Stabilization Ordinance (RSO) and, therefore, cannot be included in a notice to pay rent or quit. Because the landlord’s notice to pay rent or quit included SCEP fees, it overstated the amount of rent due and was invalid.
The Systematic Code Enforcement Program (SCEP), adopted by the Mayor of Los Angeles in 1998, is intended to ensure that rental housing complies with State and local health and safety codes. Under SCEP, the Los Angeles Housing Department (LAHD) inspects the City’s residential rental properties with two (2) or more dwelling units once every four years. If violations are found, the LAHD issues orders to the property owner, which generally provide a compliance period of 30 days to complete the needed repairs. After the compliance period has expired, the LAHD conducts a re-inspection. If all violations are resolved, the case will be closed. If not, the property is referred to a General Manager’s Hearing. Extensions of up to 30 days may be granted for the owner to correct remaining violations, depending on progress. Failure to correct violations may result in further enforcement actions, including potential placement of the property in the City’s Rent Escrow Account Program (REAP), or civil or criminal prosecution.
As of January 1, 2022, the annual SCEP fee is $67.94 per rental unit. Landlords may pass on 50% of the annual fee as a monthly surcharge of $2.83 per unit, provided the landlord has paid the fee to the LAHD and given tenants a 30-day advance written notice.
Further information regarding SCEP fees is available from the LAHD at https://housing.lacity.gov/
The law firm of Wallace, Richardson, Sontag & Le, LLP represents landlords, property management companies, institutional and private lenders, employers and insurance companies throughout the State of California in real estate, business and employment litigation. The information provided herein is for general interest only and should not be relied upon or construed as legal advice.