California Landlord Laws Are Out of Control with Niv Davidovich
In this hour‑long interview, host Leigh Thomas Brown talks with California landlord‑tenant attorney Niv (Dmytro) Davidovich about the increasingly complex and restrictive legal environment for landlords in California, especially Los Angeles. Davidovich explains how the Just‑Cause Eviction Ordinance (JCO) limits owners of single‑family homes, how the Costa‑Hawkins rent‑control carve‑out creates a patchwork of local and state rules, and why evicting a tenant now feels like an "American Ninja Warrior" gauntlet. He shares vivid anecdotes of fraudulent renters using fake ID kits, forged cashier’s checks, and advanced squatting tactics that force landlords into costly, months‑long eviction battles. The conversation moves to Section 8 and source‑of‑income discrimination, detailing what counts as verifiable income and why landlords must navigate strict verification rules. Davidovich outlines the incentives for developers who include affordable units—density bonuses, ADU allowances, and low‑income housing tax credits—and how these can be leveraged for profit. He also discusses the Los Angeles “mansion” (ULA) tax on high‑value sales, the lingering effects of COVID‑19 eviction moratoria and related case law, and practical advice for sellers and buyers: prefer vacant properties, avoid LA‑County and Bay‑Area jurisdictions when possible, and be aware of the rare but possible jury trials in evictions. Throughout, both participants inject political commentary, criticizing Democratic Socialists of America influence and drawing parallels to historic communist regimes. The interview ends with contact information for Davidovich’s firm and a call for listeners to share their own housing stories.
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9 years ago, Orange County and Los Angeles did not have the look of a hellscape like it does right now.
We had a guy who turned the basement of his building— not even his own basement, but the basement of the building he was living in— into an actual bar. We had Facebook evidence. The guy was advertising this place on Facebook. There was videos, there was ads. It was clear He was selling alcohol with no license in a residential facility. People who— on TikTok, you can buy fake ID sets. Not like a fake ID, the whole set where you have a fake credit report, fake bank statements, the whole shebang, fake stuff. They give that to the landlord. Landlord says, wow, they check out, come on in. They'll give them a fake cashier's check, forged cashier's check. Move into the unit. You don't know the cashier's check's forged until it comes back from the bank 7 days later. By that time, they're already in. For a landlord to operate their business and to win an eviction, it's like getting through an American Ninja Warrior gauntlet, right? You have to step your foot right at every part in order to get to the other side. The tenant just has to throw one banana peel in your, in your way. That's it. They just have to get you on one little thing. Then you gotta start all over again.
I'm Leigh Thomas Brown. This is Real Talk with Leigh Thomas Brown. Today I've got Dmytro Davidovich, and I hope I said that remotely close because he's really brilliant. We're gonna talk landlord-tenant law in California, some of the crazy things he's seen along the way. And frankly, I just enjoyed having a conversation with him, and I think you'll enjoy it too. So have a listen, and I'll see you on the other side. All right, so this is a wonderful opportunity to hear about lawyerly things from somebody who does not look like a stuffshirt lawyer. Nev, welcome to the show.
Hey, thank you so much for having me.
And I'm excited for you to tell my audience where you're located. I've already given away a little bit of the tip that you're in the legal side of things, but tell 'em what you do in and around the real estate arena and give 'em a, a little background on you.
So I run a law firm out in California. Our office is primarily in Los Angeles and we have an office in San Diego and we're a landlord law firm. That basically means that we, we provide a full, full scope of legal services to landlords, property managers, developers. So that includes real estate law, construction, and then a lot of it is landlord-tenant. So we do evictions, we defend habitability claims and all sorts of other nonsense, civil rights cases, ADA, anything that a landlord or a property manager might need from a legal perspective. We handle all of that both in litigation and transactional. So we're a one-stop shop for property managers who are in a very, very difficult area here in California and especially Los Angeles. Okay.
So how long have you been doing landlord-tenant law in California?
Our firm has been open for 9 years. Okay. I've been doing some aspect of property law for my entire career, but it hasn't always been landlord-focused. I was, for a long time, I was at a law firm where we did insurance defense. So we were defending real estate brokers, escrow companies, architects, engineers, things like that. When they get sued for negligence or not following their standard of care. Then I was at a firm where we represented just owners in a lot of construction-related and then some real estate-related fields. So it was pri— a lot of public entities that own a lot of property and they build a lot of things like schools, colleges, and then also private developers. And so the private developers were the ones building apartments and condos and things like that. And then I started my own firm and that's where we really started focusing very intently on the business of landlording, managing properties, and all of the crazy stuff that goes along with that.
Okay, so audience, I already know y'all want to talk about the litigation around E&O and negligence and all that. So I, I promise you, if we have a good episode, he can come back to talk about that. So put it in the comments if you want to hear about E&O, because I know That is like a broker's dream world to hear about the things that have gone sideways. But because I'm in North Carolina and I still practice real estate, I have a lot of business from California investors who are doing everything they can to get their dollars out of California because it is so oppressive on the landlord. And it's, it's not the bad guy. So for the record, it's not like every landlord is some slumlord that is putting their boot on the neck of a tenant. It's not like that. These are great people who have great properties, but the law tells them what they can and can't do with their own freaking property, which is what drives me nuts. So in the 9 years that you've been doing landlord-tenant as a primary focus, that of course goes back to pre-COVID. Yep. And we all know that was when the federal government completely overstepped their constitutional bounds with that horrible eviction moratorium. But 9 years ago, Orange County and Los Angeles did not have the look of a hellscape like it does right now. I'm curious. Well, it's true. All of Orange County is not impacted by what Los Angeles County does, but you do have some areas that have backslid a little bit based on what I've seen. But in general, just do— we won't, we won't, we will be nice to them. We like them. We want y'all to get your area back. And this is being recorded during the mayoral campaign. So go Spencer Pratt. Never thought I'd pull for a reality show star to be a mayor of a major American city, but here we are. But anyway, in the 9 years that you've been doing Landlord Tenant, what is the most detrimental legislation you've seen passed when it comes to the landlords being able to provide good rental housing?
I mean, one of the worst things that we saw in LA is the Just Cause Eviction Ordinance. So the way it used to be before they passed this ordinance, I think it was in 2001, if I'm not mistaken, was that if you weren't rent controlled, that means if your building was built after October 1st, 1978, or if you were a single-family home, you were not subject to the rent control or the eviction control. So a lot of times people who have a single-family home, they want to rent their house. I don't know, maybe they're retired and they want to go tour the world for a year. And when they come back, they want to come home. And usually what would happen is you give them, if they've been there for longer than a year, a 60-day notice, and you say, well, it's been fun having you, time to go. This is my house. And then they said, no, we're not going to allow you to do that anymore. Even to your own house, your single-family home house. Now you have to have just cause. So you have to promise that you're going to either live there for the next 2 years as your primary residence or put a family member in. Or you have to take it off the rental market permanently, and you may have to pay them relocation.
Okay. So you have to permanently agree that you will never ever live in this house again yourself?
No, no, the opposite. You have to— the ways that you can get someone out of a single-family home or really any, any sort of building that is under this JCO as opposed to the RSO.
Okay.
Is You can do one of the following. You can say, I promise to live there for the next year.
So you're making it a primary residence, but you have to do it for 2 years.
Yeah.
Okay.
Two, you can put your child, grandchild, parent, grandparent, or spouse in the house.
So immediate family.
Correct. But sisters, brothers don't count.
Obviously they don't because families are dysfunctional. It just happens.
Right. Susan, you're North Carolina. You understand. I think I might be in the wrong state.
Pretty much. Yeah.
So you could put that person in and they have to agree to live there for 2 years.
Or they have to stay for 2 years. Okay. So what if I move mom into my house and then mom dies? Do I have to leave it empty until another family member wants to come in?
My recollection is I haven't had that actually happen, but my recollection is you might have to offer it back to that original tenant at the rent they were paying. If it's less than 2 years.
After, oh, so if you don't abide by the rules as the owner, you have to let the old tenant come back and rent it again?
You have to give them a notice.
Who made this up?
No, it's, I'm, I'm, it's actually very difficult to have out-of-state clients because when I tell them the rules, they don't believe me.
No, it sounds very dystopian, very much like somebody with a an axe to grind is down at City Hall saying, we're going to fix your little red wagon, buddy. And they make what's happening into a rule.
That is what's happening. We have 4 people, 4 people on our city council who are members of the Democratic Socialists of America. It's ironic about that, but you know, that's exactly what I was about to say. That's what, that's my line. They're just socialists.
Yeah.
Okay.
They don't want you to own anything. No, no, no.
And they specifically say that. They say we are trying to tear down the capitalist oppression. Their, you know, their leader, Commandant, the New York guy, Mamdani, he says, I campaigned as a democratic socialist. I'm going to be a democratic socialist. I believe in seizing the means of production, seizing the means of production, stealing your crap. That's what that means in English.
Make sure they notice they say that from their iPhones.
Yeah.
That could only have been invented and created by an unfettered capitalistic business mind in the United States. But I digress. Okay. So back to our Just Cause Ordinance, which absolutely sounds made up. So now we have, you can move back into your house and have to stay 2 years. Your immediate family, but not your siblings can move in. They have to stay for 2 years or the old tenant gets a chance to come back. How, how well can you take it back?
Or you can just say, I will never rent this house ever again.
Oh, okay. So it's prohibited from ever being a rental. So what if I sell it on the open market to you? Does that mean you could never rent the house? Does it run with the house or is that just—
It's a big question. No one really knows.
Oh, okay. So until somebody they don't like tries to do it, that's when it'll come into enforcement.
Yeah. So they passed this law in '21. Nobody tried to as far as I know, rent a house as a subsequent purchaser that was taken off the market by a prior owner and then gotten in trouble for it and then had to litigate it and then take it up to the Court of Appeal, which is all the things that would need to happen for us to know what the law means.
It's never happened. Nuts. Okay. So let's just go back to 60 days notice. Why do we have to give them 60 days notice? Is that standard across California?
Yeah. So that's a state law rule that says if they've been there for less than 12 months and you want to cancel their lease, like let's say if they were there month to month from the get-go and 6 months in, you wanna give them a 30 days notice. Uh, you could do that. You can give them 30 days and they have to go. Once they've been there longer than 12 months, the notice has to be 60 days.
So there is no such thing as month to month after 12 months. It becomes 6 times a year. You have a chance.
6 times a year. No, no, no. No, that's the thing.
Every 60 days, really? Because every month you're adding 60 more days on.
No, no, it's, it's really worse than that. It's unless you have a reason to kick them out, like we said, just cause, they can really stay there forever.
So does just cause include can't pay for the house anymore? Because right now, of course, we're looking at the shedding of jobs due to—
Of course, of course. The just— I was, I was saying that those are the no fault just cause. The at-fault just causes still include the regular stuff, which is didn't pay the rent, didn't follow the lease, causing a nuisance, using the property for an illegal purpose. And you'd be surprised what we get for that. I got a lot of stories.
Well, give us one. We, we need to know what illegal purposes could be. I'm gonna guess obviously drugs, but money laundering, fentanyl.
No, no, we don't really get a lot of that. We've had prostitution. They used it as a place to do prostitution. We've had a lot of commercial kitchen use. So we had a lady that was, you know, using her kitchen to make food and then selling it out on the street, which you're not allowed to do. And she got cited by the county, which means the landlord got cited by the county. What else have we had? We had a guy who turned the basement of his building, not even his own basement, but the basement of the building he was living in. Into an actual bar.
Oh, like a speakeasy? So you could pay your membership fee and knock 3 times?
Yes. Now here's the crazy part about that. So this, the client ended up not paying our, our fees. So we had to take, go out of that case. But I know the people that took his case after that. Right now we had Facebook evidence. The guy was advertising this place. On Facebook, there was videos, there were ads. He was selling alcohol with no license in a residential facility. The judge ruled in his favor.
Why'd the judge find for him? Because he's a tenant and he's just trying to make a living?
He said there's insufficient evidence that this was happening.
Well, what would constitute insufficient evidence?
I have no idea because I'm not exactly sure what else you can provide.
Okay, so then what happens in that case? Does the guy keep on operating his speakeasy because the judge let him off?
He probably doesn't because now he's afraid that the cops are gonna come shut him down because we're aware of it. So he probably just stops that and maybe rents a different apartment, you know, keeps this one and then rents another one and runs his speakeasy over there. We have a big problem of fraudulent renters. This is like every week or two I get a call about this. People who on TikTok, you can buy sets, like fake ID sets, not like a fake ID, the whole set where you have a fake credit report, fake bank statements, the whole shebang, fake stuff.
What?
They give that to the landlord. Landlord says, wow, they check out, come on in. They'll give them a fake cashier's check, forged cashier's check, move into the unit. You don't know the cashier's check's forged until it comes back from the bank 7 days later. By that time they're already in. And now the, the police, unlike North Carolina, I imagine the police actually help you in North Carolina. In California, I feel bad for them. Their hands are kind of tied. But if they show up and the person says, well, here's my lease, they're gonna say, oh, it's a civil matter, go to court. And you literally have to go to court to kick someone out who is a criminal who hasn't ever paid time.
So they're basically just advanced squatting at that point. They're squatting, but with some paperwork so they look better.
Yeah, no, no, it's very advanced. It's very organized and it's a good way of getting free rent because the average eviction time in the county of LA is 6 months.
They can do a lot of damage to a house in 6 months too, because people that are being evicted don't tend to have a high level of responsibility about the place where they're squatting.
No, they don't. And yeah, I mean, there's videos on about like Section 8 people intentionally damaging, just destroying their unit, you know, making videos, taunting the landlord and saying, you ain't never gonna get me out.
See, that's the worst part about that is like the housing voucher program has a place for the elderly, disabled people. I mean, we should have that voucher program, but the, the bad actor ruin it for everybody cuz landlords don't wanna mess with it knowing that you've got a mixed bag here. You might get the good honorable person and you might get the dirtbag. He was tearing it up and bragging.
North Carolina, 48 or 49 of the states in America, as a landlord, if someone comes and says, I want to use my Section 8 voucher, you have the right to say, no, I don't want to be in business with the American government. That's my right. I don't want to have, I don't want to sign that contract. In California, that's called discrimination. It's called source of income discrimination. You cannot say no to someone just because they're coming to you with Section 8. On top of that, if someone comes with Section 8, you have to offer them the, the right, the option of instead of checking their credit, letting them provide you with verifiable means of legal income.
What is verifiable means of legal income in the eyes of California?
A W-2, 1099. Technically, I think they would say bank statements, but I tell my clients not to trust bank statements, and I don't think that's verifiable. Because you gimme 30 seconds, I could show you a bank statement of mine that says I have a quadrillion dollars in the bank.
It's, that's a technical term to have a quadrillion. You're making a lot of money in landlord-tenant law.
That's what I'm saying. That's more money that exists.
But wait a minute, landlord, if I question your verifiable income there, am I discriminating now because I ask questions about your bank statements?
Nope. You're allowed to.
You're allowed to ask questions. Okay.
You're allowed to verify. Yeah. The reality is even a W-2 or a 1099, I could fake that too. But at least with a W-2, 1099, there's an employer or there's someone who's paid this money. I can actually give that person a call and say, does this person really work for you? With a bank statement, can't call up Wells Fargo or Bank of America and say, hey, is this real? They're not gonna talk to you.
Really, from your perspective, the only way to survive as a landlord in California is to be absolutely brutal on when applications come in. So that you are remotely happy and satisfied with this person, you're still taking a huge risk.
Yep. Now a lot of people like Section 8 because the way that you really monetize Section 8 is there's a lot of perks that they give to California developers to build affordable units, units that you can only rent for a much lower rent than the market.
Sure.
But that affordable rent only limits the amount you can charge the tenant, there is nothing illegal. And in fact, it's a well-known thing to do and even encouraged that if you get a Section 8 person in, into, let's say, a unit that costs, that should be $2,500, they have a $2,000 voucher and they, uh oh, I'm sorry. Let's say they have a $2,000 voucher and the maximum affordable rent is like $900 and all they have to do is pay $500. You can take an affordable unit that you really should have only been getting, say, $900 or $1,000 for and get the full $2,500. So you've got the benefits of having the affordable, which is some tax benefits. You usually got some density bonuses, higher height restrictions, wider side restrictions. So you got all of that stuff, plus you're going to get market rent.
Okay, so hang on a second. So if I'm a builder or developer in California, Is this all of California or just LA where you're working? All of California.
This works anywhere.
So if I agree to do some Section 8 units in my complex, I can have all kinds of variances on the entire building, like the design, the height, the size, everything.
No, no. So it's not Section 8, it's affordable.
Okay. Excuse me. So, so any, is this like 50% A% AMI? What do they use for a guideline? 80%?
Well, there's different kinds of affordable. So there's low income, very low income, and extremely low income.
Mm-hmm.
I'm not making that up. Those are real things. It's 80%, 50% AMI, 30% AMI.
Yeah.
And so the more, the more you restrict, the more they will give you perks. So for example, you get a density bonus of 5% if you give them 11% of your units as extremely low.
Oh, then that absolutely pays off for the developer. Yeah.
Exactly.
As long as you have a plan in place to check those units, change the air filters so you can see what's going on in there.
Right. I mean, a lot of the affordable units, they're, they're fine. The Section 8 units tend to be a little bit more—
it's a mixed bag.
It tends to be a little bit more difficult. Yeah. We have a lot of people who just— listen, there's no other way to say it. There's a lot of mental health issues.
Correct.
You know, and we don't have to go down that rabbit hole.
We can blame Big Pharma, Big Food, and all the things that are in our water and in the environment.
We won't have to go down that road because I think it's bad parenting, but okay.
Well, that's people who use this as a babysitter. Then they give their children Doritos at 1 year old and think that's food. That's not food. But anyway, so I came fascinated by this because I'm a big fan of the low-income housing tax credits, which is, I think, one of the good things that the federal government can do. That's a good thing. I give them one because those obviously encourage private developers But I'm fascinated because I did not know that in California, the providing any number of those affordable units could add another story to your building and change your footprint. I just thought it was a way to stack it in for the cost savings, but it's going to be a cost and a revenue improvement.
Oh yeah, exactly. And it works because everyone who builds ends up having those few affordable units. And so That's an example of where the government is actually doing something smart.
See, there you go, California. You did something good. Good job. We give you credit for that.
What? You know, even a broken clock is right twice a day, right?
Right. They're also good on allowing statewide approval of ADUs. I like accessory dwelling units, and California did good on that. Right. Okay. So on the landlord-tenant side.
Yeah.
You mentioned October 1st, 1978.
Yeah.
Did you say that anything built after October 1st, 1978 is not tax exempt?
In the city of Los Angeles. And that date is different depending on what city you're in. So let me explain. There's a law called Costa Hawkins. Costa Hawkins is a law they passed in 1978.
I know Mr. Hawkins' son, by the way. He's the CEO of the California Realtors, Phil Hawkins. Shout out Phil, because I got educated on that legislation. By Mr. Hawkins. So just for the record, go Realtors.
Yeah, that's something not a lot of people get to say, but okay.
I'm a nerd. I probably should have warned you about that, that I did legislation and we had to fight hard as the Realtors to protect Costa Hawkins.
Yeah, we actually have to, we fight it all the time. Every couple years they try and get rid of it. So Costa Hawkins for your listeners. Normal people. Yeah. It says like this, if you didn't already have a rent control in your city, you cannot put any properties under rent control that were built after February of 1995. However, if you already have a rent control in your city, when they passed this in February of 1995, then you cannot put any, any properties under rent control If they were built after when you started your rent control, which in the city of LA was October 1st, 1978. For example, in other cities like West Hollywood, it's 1984. And for other cities that never had it, it goes all the way to February '95. So you can't have rent control anything that's built after February 1st, 1995. That's not allowed. That's local rent control. But remember, we already have state rent control. For everything that's older than 15 years old.
Okay. So how can anybody keep up with this convoluted mess of local and state regulations and laws? They're, they're building a system that traps every landlord because you're going to break a law no matter which way you shake it.
That's, that's exactly right. Number one, they can't keep up with it. They pay me to keep up with it. And that is a full-time job. Just that part of it. And second, it is purposefully designed to do exactly what you just said. For a landlord to operate their business and to win an eviction, it's like getting through an American Ninja Warrior gauntlet, right? You have to step your foot right at every part in order to get to the other side. The tenant just has to throw one banana peel in your, in your way. That's it. They just have to get you on one little thing and you got to start all over again.
Okay. So let me ask you a question because obviously COVID introduced the eviction moratorium, which was absolutely unconstitutional and illegal by the CDC. And everybody immediately caved until Georgia and Alabama fought back and got the win on that for all of us. But it took a long time before a lot of these states and municipalities stopped enforcing it because Oh, a poor person shouldn't be evicted just for not paying the rent. Let the landlord go to foreclosure in the meantime. Right. When we see the, the new scamdemic, which is coming right now upon all of us, if it gets tried again, it probably will in areas like California because of course control is the addictive— it's a feature, not a bug of politics. How do you think an eviction moratorium goes over the next time they try to do it? Do you think the landlords will speak up and push back, or are they gonna take it in the shorts like they did last time?
So here, here's what happened that not a lot of people know about. In New York and in California, the moratorium wasn't really what everyone says it was. It wasn't, you are not allowed to evict people for non-payment of rent, period. That, that is what it was in Alameda County. That's where Berkeley and Oakland are. That really is what it was. But in LA, it said, You, you can't be evicted if you have a COVID-related reason for not paying your rent. It's literally what the moratorium said. And at my firm, we created a very revolutionary way of doing the law. We read it.
That's crazy. Now you've just stepped over the line.
We actually read it and said, wait a minute, this doesn't give them a blanket defense. They have to prove. That they have been affected by COVID somehow, and that's why they're not paying the rent. Now, the state seemed to imply that you can do this self-declaration saying, I'm going to self-attest and sign this piece of paper that says I was affected by COVID, and now you have to take my word for it. Supreme Court of the United States said no. There's a case called Chrysalis that came out. Not Chrysalis. Chris, it sounds like chrysalis. Can't remember what it's called now, but it wasn't even a full Supreme Court case. It was just a ruling on a temporary restraining order about this big. But what it says is you cannot have this rule because a man cannot be the judge of his own case. So the whole idea of self-attesting to the fact that you have a defense in the case where you are the defendant. Violates the Constitution. It violates due process. And so we took that case in September '21, started showing it around to all the judges, and even the judges in LA can't overrule the United States Supreme Court. And they said, okay, you're right. You are entitled to a hearing on the COVID defense on that really initial issue to decide if we can even move forward with the eviction. Now, by September of '21, again, people don't really remember this. Most stuff was open, even in California, even in Los Angeles. They were making movies. The studios were open. Supermarkets were open. Everything was open by September of '21. It was just a lot of the stupid laws that kept on going. And people would come in with the dumbest stuff and judges were shutting them down. And we were evicting people for nonpayment of rent for years before anyone else was.
Okay. So I want to hear one of the dumb things they came in with. Tell us something people tried to get away with.
They would show their bank statements from April of 2020 and say, see, I was affected. And remember, in September of '21, they would, and then they would say, I can't find a job. September of '21, if you wanted a job, you could have 7. McDonald's was offering signing bonuses. Nobody was working. Nobody. It was a massive labor shortage. And judges would comment on it. They would say like, In what world can you not find a job? I drove here. Judge said this to us once. I drove here and I saw nothing but workers needed signs. So in what world can you not find a job? No one, the judges just didn't buy it. And so they would just say ridiculous things. No one would actually say they had COVID. I think we had that like one time, you know, oh, the other, the other one that was great was they, they said they were affected by COVID now. At this point, we were, we were trying to evict them for rent they didn't pay in 2023, not even 2021 or 2022. And I was deposing this lady and I said, okay, what do you do for a living? She says, I deal cards in the casino. I said, all right. Now, did they shut you down when COVID started? She's like, yes. They told me to go home. I was like, when did they bring you back? She's like, September of 2020. I said, okay, how much did you get paid? Minimum wage. It's like, did you, did you continue working? Yes. In '21, how much were you making? Minimum wage. It's like, so that's more than the minimum wage in 2020. Yes. And then in '22, are you still working? Yes. Still minimum wage? Yes. That's more than you were making in '21. She had to admit that. So I'm like, so wait a minute. During the time that you're talking about right now, you were actually making more money than you were during COVID And she still said, yeah, I'm COVID. Because that's why I didn't bid around. Completely crazy stuff.
Okay. So if somebody is a landlord in California right now, and they've had it with all of the, the tapestry of rules and regulations and tenants, and they're over it and they want to move their money to North Carolina. And I may have some clients that are watching this show. What's the first advice you would give them before they put that property on the market, let's assume that there's, it's tenant occupied and they plan to let the tenants ride from owner to owner. Is there anything they should be aware of or any weird rules that govern selling?
Well, of course we have the ULA and that's a big issue. You know what that is, right? And for your listeners or viewers, for the normie listeners, okay. So it's this very stupid tax that they passed in LA. It advertised it as a mansion tax, but it applies to all properties in the entire city of LA. And it says if you sell it for more than— they've adjusted it, but it's roughly $5 million and change— then you're going to pay this extra 4 and something percent tax. And then if you go above $10 million and change, then it's 5 and something percent. So that is really going to affect Obviously how much you're going to sell it for.
Now, and let me interject there for our listeners. If you live in North Carolina or in Kansas, or even in Western New York, you might be thinking, well, $5, $10 million is a lot of money. It's not when you're looking at LA because the prices are so high out there. But also I work with a lot of people who own multifamily. And when you own a property that's got 16 units, and it's going to sell for $12 million. That's not a mansion. That is somewhere that you've been providing housing for multiple people, doing maintenance and taxes and upkeep for all these years. It's pretty astonishing that there is any extra tax on the person who took the risk to keep that investment in the market in service to provide housing for all these people. It's not— the mansion tax makes me nuts when you call it that, because Of course it's marketing, right? The media and the politicians have to market it to the lowest common denominator who won't ask any questions.
Yeah, that's it. They just, they just, they weaponized this, really the income disparity that's going on right now. And I'm sure that's true. I'm sure there is an income disparity, but they are creating an entire society which is based on envy.
Yes, that's true.
As opposed to saying, you know what, I want to go up there. I want to be like that guy or that, that lady who's been successful. So let me figure out what they're doing and I'll try and be like that. There's a whole culture of people who are doing that and hustling and hustle culture. But then there's this entire other body of people who are saying, well, you know what, I don't want to do that work. I want to major in Uh, medieval French literature or underwater basket weaving. But you know what? Even though I'm doing that and you are doing that, you shouldn't have that. That's not fair. We should all have the same.
Now a good time to point out that motivation and ambition are not 7 deadly sins, but envy is. I'm just gonna point that out. Just, mm-hmm. It really is.
I mean, it's, that was the problem. You gotta understand. So my background, my parents are from Moldova, which probably no one's ever heard of, but it's a tiny little country that used to be part of the USSR. So my entire family grew up, my grandparents, my parents, they grew up under actual real communism behind the Iron Curtain. Literally. Yes. And so I grew up listening to all of these stories about what that was like, and it's very much like reading. You know, 1984, that's, that was their real life. And it was such nonsense. And there were so many lies, like the government, just all they did every single day, every word out of their mouth was a lie and everybody knew it. You know, I'm not saying that our government is always honest, but I mean, our government is angels compared to what the communists were doing. And now you have an entire group of people who are building a society and, and building a culture based on these same failed and really evil values. And it's terrifying. You know, it, it, it, it's crazy. They're, they're literally redoing what happened there. Said, I'm gonna have the free grocery store. So lo and behold, 1,000 people line up and 20 people go in, take everything, and they say, there's no more bread for you. Did we not see the pictures of the breadlines in Russia?
Well, no, we didn't, because the educational system has been taken over by those same DSA activists. And if you can wipe out all the negatives about socialism and communism, the young people are unaware. And by the way, the— if you're a younger person watching or listening to my show, which I've checked my demographics, we're not a super young crowd, but if you happen to be the young person who wandered up in here, you're going to have to get yourself some education that goes beyond what you got in today's public school system, because they do not tell you the truth. About the way things went down behind the Iron Curtain, behind the Berlin Wall before it came down. We're old enough to remember when it came down, and it was earth-shattering. And it was a— to watch people see what freedom could look like was wild. But of course, now we're watching our freedoms be stripped away from us under the guise of safety, which was the argument they used for the eviction moratorium. We got to keep people safe, stay safe with the, the masks and the arrows and all the lies that were told to us to see if everybody would just give in. And I think the perspective that you bring and your family brings is what kids need to be hearing right now, because the America we're in right now is not the America I grew up in. It's changing so quickly, but we need to hear the perspective. My neighbor over here, she's Cuban. Best education my kids ever got was her completely unloading on them about what happened under Castro, right? And they, they became very ardent believers in the American system after listening to her. So I hope that if you have kids or grandkids, or you want more education yourself, talk to anybody whose family came from an oppressive society, because you'll see things differently. So I'm grateful that you brought that up.
Yeah, I mean, no one's ever left Cuba or Russia or Vietnam or China, you know, and, and said, well, you know, I, I like the weather here, but back then it was really good.
No.
And specifically with the apartments, I always say no, no one ever left one of those places and said, yeah, the government was really oppressive, but the apartments were beautiful.
They were wonderful.
No, everything was cramped. And that's the part that I really, really drives me nuts is that I think the DSAers and the communists are actually okay with living poorly as long as everyone is living poorly. I don't mind, I don't mind having to live bad as long as you are living bad.
Meanwhile, the leaders have whatever they want in their walled compounds and their private security. So just notice, y'all, if you're the person who thinks everybody should have the same thing, it never works out that way because somebody's always going to have to be at the All right. So before we wrap up this episode, which has already gone in 5 directions for which I'm so grateful, I asked you about sellers and what they should consider if they're moving. If you are the person who's buying rental property and you're in California, 'cause you love it and your family's been there 5 generations and dang it, you're gonna help bring the state back from the brink of destruction. How do you advise somebody getting into investment? What are the things they should look for? To look for? Are there ways to evaluate which county, which municipality is better, and should they have legal counsel before they get into this?
You have to understand that in California, the laws are very different when you go from city to city and county to county. We have a lot of clients and we represent a lot of clients who have properties outside of LA County. And just so everyone understands, there's a thing called LA City. LA City is just one of the cities in LA County. There are 88 How a lot of them were up north and very, very few people live there, but right next to LA County, we have San Bernardino and Riverside, Ventura, Orange, and those places are a different universe, a different world completely. It doesn't take us 6 months to evict people there. They don't have 16 different organizations providing them free legal defense and asking for jury trials in evictions. They don't.
Yeah. What? You can't? I can get a jury trial for eviction. Is that real?
Oh yeah. Like on TV, 12 people, the full shebang.
I can't even with that. Okay.
So our longest one was 10 days. We had a jury trial, 10 days for an eviction.
Well, the jury was getting paid for 10 days. So I guess why hustle it up? They get their $14 a day. They're good.
Yeah. So. In, you, you have that right statewide, but no one uses it outside of LA County and the Bay Area counties. Even in San Diego where they, they have a little bit of legal defense, no one really asks for jury trials. It's all bench trials. They have their other problems. But point is this, if you stay out of LA County, you are going to avoid 90% of the problems that I gripe about. It's really that simple. Don't come to LA County or the Bay Area. Or the Bay Area. Correct. Now, there are exceptions to that rule. There, you can still get really, really good deals in, even if you're going to be in the city, even if you're buying a rent control property, because sometimes you'll get some property that is half vacant and hasn't really been managed well and is being sold at a fire sale. You can still make money on that property because you're going to renovate it, start renting it out for market. If the units are already vacant, you don't have to evict anybody. Build a whole bunch of ADUs in the parking lot, and now you've added a tremendous amount of value and refi it out and get your money back. And I'm an investor in a deal that is exactly like what I just described, and we're scheduled to get 85% of our money back within the first year. That's kind of hard to beat.
Absolutely.
So you can still, you could still make money, but it has to be on deals like that. Whereas everywhere else you're safe getting what I would call normal deals. But here, if you buy a normal deal, there really isn't enough juice to make it worth the squeeze. 'Cause the risks that you're taking, just, you know, running into one crazy person, one crazy tenant could ruin the entire building.
So basically, if you're selling in California, you're better off if it's vacant because the buyers prefer a vacant property. And if you're buying in North Carolina, you prefer an occupied unit because then we have a higher cap rate.. And because we don't have those policies, so people can take the rents to market. So this is why you always talk to your local realtor, talk to somebody in your zip code, and then find specialists like Nev here who understand the laws around tenant-landlord. If somebody wants to reach out to you, whether they're in California or have somebody in California needs some counsel advice or just need to talk to you more, what's the best way for them to find you?
So our website is davidovichlaw.com. I will spell that. It is D-A-V as in Victor, I-D-O-V-I-C-H-L-A-W.com. And all of our contact information is on there. You can follow us on YouTube and Instagram and TikTok and LinkedIn and everywhere else where our videos are posted. And our phone numbers are on there. We have an office in LA. We have an office in San Diego. And we service the entire Southern California area.
And of course, if you were listening to this while you're on your daily walk or you just were not paying any attention, all of the contact information information is in the show notes for this episode, so you can go find it and reach out. And of course, you should leave a comment below about what you were surprised by. And if you want me to bring this wonderful guest back to talk about E&O and negligence and real estate kind of issues. Neve, thank you so much for coming on and for all the passion that you show for landlord-tenant, because at the core of all of this, housing is wildly important. It is not a right, it is a privilege, and we have to make sure that we are providing so many opportunities that everybody has a pathway to something better. So thank you for what you're doing for everybody in California.
My pleasure. Thank you.
Hit the bell, subscribe, make a comment. We'll see you next time. And hey, if you've got a story too wild to keep to yourself, send me a message because you just might be the perfect next guest. Thanks for hanging out with me. I'll see you next time, right here where real estate gets real.
