If you own rental property in California — or have ever thought about it — the legal saga of Richard […]
If you own rental property in California — or have ever thought about it — the legal saga of Richard S Hirschfield Santa Monica CA is the kind of case you wish someone had told you about before you signed the deed. It’s a decades-long dispute rooted in four parcels of land on Marine Street, a demolished-and-rebuilt property, and a law called the Ellis Act that many landlords believed was their golden exit ticket. The courts disagreed, and the consequences are still reverberating in Los Angeles County courtrooms today.
The Setup on Marine Street
In 1994, Richard S. Hirschfield, acting as trustee of the Richard S. Hirschfield Trust, purchased four contiguous lots at 738 through 746 Marine Street in Santa Monica — lots that together contained five rental units spread across the four parcels.
For about a decade, nothing unusual happened. Then, in 2004, Hirschfield withdrew those five rental units from the residential rental market using the Ellis Act. He then demolished the existing structures and built four brand-new single-family dwellings, each sitting on its own separate assessor parcel.
From Hirschfield’s perspective, this was a clean break. Tear down old rent-controlled apartments, build fresh single-family homes, and — by virtue of the Costa-Hawkins Rental Housing Act — operate outside the Santa Monica Rent Control Board’s reach. It’s a strategy that property attorneys had whispered about in conference rooms for years.
There was just one problem.
In 2009, Hirschfield rented the dwelling at 746 Marine Street to a tenant named Tanya Cohen — just five years after withdrawing the units. That single decision triggered a legal clause most landlords had never scrutinized.
The Ellis Act Trap Nobody Talked About
The trial court ruled that the property was subject to rent control under Section 7060.2(d) of the Ellis Act, which permits local agencies to reimpose rent controls when accommodations are demolished and new accommodations are constructed on the same property and offered for rent within five years of the withdrawal date — regardless of any general exemption for newly constructed units.
Hirschfield’s legal team pushed back hard. His attorneys argued that because each new structure was a single-family dwelling separately alienable from any other, the Costa-Hawkins Rental Housing Act shielded each unit from local rent control ordinances.
The California Court of Appeal wasn’t persuaded. The judgment was affirmed in full, with the Board recovering its costs on appeal.
One attorney who closely followed the litigation but was not a party to it told us off the record: “Everyone assumed Ellis Act demolitions and rebuilds would reset the clock. Hirschfield proved that assumption could cost you a fortune.”
Why This Case Matters Beyond One Landlord
The Richard S Hirschfield Santa Monica CA dispute isn’t just a footnote in California real estate law — it’s a live landmine for any landlord who has used or is considering using the Ellis Act as part of a redevelopment strategy.
Santa Monica’s rent control law currently applies to approximately 27,000 rental units citywide. Roughly 70% of Santa Monica’s population are renters, making the city one of the most tenant-protective jurisdictions in the entire country.
For context on how aggressively the city monitors Ellis Act activity: in 2022, only 22 units were given notice that owners intended to withdraw under the Ellis Act, down sharply from an annual average of 98 units receiving such notice between 2015 and 2019.
Meanwhile, median starting rents for 1-bedroom units in the controlled housing stock rose by $200 to $2,500, and for 2-bedroom units rose nearly $400 to $3,400 in 2022 alone — which explains why landlords are eager to exit rent control, and why the Board fights back so hard when they try to do it through demolition.
The Secondary Litigation Nobody Mentions
Most coverage of the Richard S Hirschfield Santa Monica CA matter stops at the Ellis Act ruling. But a separate strand of litigation ran concurrently — and it illustrates just how multi-front these property disputes can become.
In May 2019, Hirschfield filed a contract lawsuit against Cohen in Los Angeles County Superior Court. Cohen responded with a cross-complaint, alleging violations of Civil Code Section 1940.2 and the Santa Monica Municipal Code Section 4.56.020.
When Hirschfield moved for attorney’s fees as a cross-defendant, the court denied the motion, finding that Hirschfield had not achieved any special benefit from filing and was therefore not the prevailing party.
What this secondary case illustrates: rent control disputes rarely end at the Rent Control Board. They metastasize into civil litigation, cross-complaints, and fee battles that can drag on for years and cost both sides six figures in legal fees before anyone sees a trial.
What Smart Property Owners Are Doing Differently Now
Attorneys advising landlords in West Los Angeles now treat the five-year re-rental window under Ellis Act Section 7060.2(d) as a hard stop, not a soft guideline. The Hirschfield case made the legal risk of that window undeniable.
The Santa Monica Rent Control Board calculates annual rent adjustments using 75% of the Los Angeles area Consumer Price Index — the 2024 General Adjustment, for instance, allowed a 3% rent increase, capped at $76 for higher-rent units. Landlords who re-enter the market within the prohibited window don’t just face rent control — they face years of capped rents based on whatever the tenant first paid.
A property manager who handles over 40 units in the Santa Monica area shared this with us: “I had a client who read about Hirschfield after the fact and called me in a panic. He’d rented a rebuilt unit at 746 days past his Ellis withdrawal. We spent the next three months with counsel figuring out his exposure. It wasn’t cheap, and the stress was immense.”
FAQs About the Richard S Hirschfield Santa Monica CA Case
Q: What exactly is the Ellis Act in California? The Ellis Act is a state law enacted in 1986 that gives property owners the right to exit the rental housing business entirely. However, it comes with re-rental restrictions — most critically, the five-year window under Section 7060.2(d) that the Hirschfield case made famous.
Q: Did Hirschfield ever win any part of his case? The appellate court affirmed the trial court’s judgment in full, with the Board recovering costs. Hirschfield did not prevail on his central Costa-Hawkins argument.
Q: Does this ruling affect landlords in other California cities? Yes. The Ellis Act is a state law, and its Section 7060.2(d) applies wherever local rent control ordinances exist, including Los Angeles, Berkeley, and San Francisco. The Hirschfield ruling is binding precedent in the Second Appellate District.
Q: If I demolish and rebuild, can I ever escape rent control? Yes — if you wait more than five years after your Ellis Act withdrawal before renting again, the re-rental restriction under 7060.2(d) does not apply. Timing is everything, and it should be documented with precision.
Q: What is the Costa-Hawkins Act and why didn’t it protect Hirschfield? Costa-Hawkins generally exempts separately alienable single-family homes from local rent control. However, the appellate court ruled that the Ellis Act’s re-rental provision takes precedence within its five-year window, effectively carving out an exception to the Costa-Hawkins exemption.
The Bottom Line
The Richard S Hirschfield Santa Monica CA case is a case study in what happens when a landlord understands one law well and misreads another. The Ellis Act was used correctly. The demolition was legal. The new construction was permitted. But one decision — renting a unit five years after withdrawal — turned a fresh-start strategy into a decade-plus of litigation.
Santa Monica’s rent control law exists because of a documented housing crisis: a persistent shortage of units, low vacancy rates, and rapidly rising rents that the city found were endangering the health and welfare of tenants — particularly the poor, minorities, students, young families, and senior citizens. Courts have shown they take that legislative intent seriously.
If you’re a landlord, investor, or attorney navigating the Santa Monica rental market in 2025, this case deserves a spot in your reading list — before you pick up a wrecking ball.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed California real estate attorney for guidance specific to your situation.
