Predatory Landlord Scheme Starts To Unravel in East Palo Alto

After gobbling up more than half of the rent-controlled apartments in East Palo Alto, Page Mill Properties immediately began imposing huge rent increases and evicting tenants at unprecedented rates. The company has repeatedly sued the city over local laws protecting tenants and filed unsuccessful petitions to raise rents. Page Mill Properties has also invoked the controversial Ellis Act to evict outspoken tenant activists, prompting accusations that the evictions are retaliatory.

The Oberle litigation involves Page Mill's effort to exploit a "mom-and-pop" exemption from the local rent law. Under the exemption, owners of four or fewer units are not subject to the rent increase limitations of the RSO. Page Mill created numerous companies, each to own four or fewer units, and then these companies imposed huge rent increases claiming to be exempt from the ordinance.

The Court squarely rejected Page Mill's argument that each of its corporate entities was to be considered separately. Applying the alter ego doctrine, the court disregarded the corporate forms set up by Page Mill in evaluating whether these entities could qualify for the exemption as owners of less than five units. The Court found that the tenant plaintiffs had shown such a "unity of interest" that the separate corporate personalities "do not in reality exist," and that the multiple entities had been used as conduits for a single enterprise. The court determined that recognizing the corporate entities would lead to an inequitable result.

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