Boarding House Operator Ordered to Pay City $25K

Share this:



By Sara Hall | NB Indy


After two years of litigation, the city and an illegal boarding house operator have finally come to terms.

The operator, Derek Leason, will have to return the houses to single-family residences as the zoning code requires and pay the city of Newport Beach $25,500.

The city filed a suit in the Superior Court of Orange County in 2008 against Leason for multiple zoning code violations.

Leason had agreed to pay the city $22,500 in an earlier proceeding and on Sept. 14 Judge William Monroe ordered Leason to pay an additional $3,000 in sanctions for refusing to sign a settlement agreement which he had previously agreed to, according to city officials.

City Attorney David Hunt said Leason made the agreement in open court in July and refused in early August.

Leason has three years to pay the city the $22,500 amount, said Hunt, as long he is not financially available to pay right away. The $3,000 charges from the court are due immediately, Hunt said.

He also has to come into compliance with the zoning code immediately, Hunt added. The first inspection is at the end of October.

Leason owns three houses in the East Santa Ana Heights neighborhood, within a district that is zoned for single-family use or single housekeeping unit, Hunt said. Several people could rent out the house together as a single housekeeping unit, Hunt said.

“Mr. Leason did a lot more than that,” he said.

Leason made physical changes to the properties, Hunt said, modifying the houses without permits to bring in more boarders. He subdivided each of the homes into multiple dwelling units and rented them out.

“It increases the traffic, noise and the intensity,” said Hunt, adding that it also affects property values. “It’s basically like putting an apartment building in the middle of a single-family neighborhood.”

Residents in the neighborhood bought their homes with a certain expectation, Hunt added, that the area was specifically zoned for single housekeeping units. This agreement will bring the neighborhood back to what residents originally expected, he said.

“Residents seemed pleased with the outcome,” said Councilwoman Leslie Daigle, whose district includes the neighborhood where the Leason houses are located.

“(Boarding houses) clearly (have) a negative impact on the neighborhood,” said Hunt.

The city began its investigation after receiving complaints from neighbors, according to a statement from the city. The city found that Leason was renting multiple, separate, illegal units to individual tenants in violation of the city’s ordinances.

The recent judgment also requires Leason to return the properties to single-family use and rent each of them solely through a written, rather than oral, agreement to a single housekeeping unit. It also requires Leason to allow city officials to inspect his properties and the written leases with a 36-hour notice.

The agreement forces Leason to comply with the zoning codes, Hunt said,

“It takes away any defenses or excuses he had,” he said. “And the city will make sure he is complying.”

If he still does not meet the terms of the zoning code, Hunt said, he will be in direct violation of the judgment and there will be a harsher penalty, including possible jail time.

The city had filed suit against Leason for not only the zoning violations, but also for creating a nuisance and violating the state’s unfair business practices law by advertising and renting illegal dwelling units.

“This action is part of the city’s ongoing and determined effort to enforce our laws regarding boarding houses,” said Daigle in a statement. “Boarding houses negatively impact our neighborhoods and will not be tolerated in Newport Beach.”
















Share this: