Los Angeles – Today, City Attorney Hydee Feldstein Soto announced that her office has filed a civil enforcement action against a group of individuals and their related companies accusing them of operating a sprawling illegal multi-million dollar rental property scheme and violating the City’s short-term rental ordinance (“STR Ordinance”). In addition, the Defendants exploited vulnerable Angelenos by illegally raising the price of their rental properties in the wake of the wildfires, violating California’s Anti-Gouging Law.
Feldstein Soto’s lawsuit, filed for violations of California’s Unfair Competition Law (“UCL”), seeks a permanent injunction barring the individuals and their associated companies from engaging in short-term rental activity in the City, except that which is authorized by the STR Ordinance, a permanent injunction barring them from engaging in price gouging, restitution to tenants impacted by the illegal activity, and tens of millions of dollars in civil penalties.
“The scale of the alleged activity - the illegal short-term rentals and the wildfire-related price gouging - is outrageous,” said Hydee Feldstein Soto, Los Angeles City Attorney. “The defendants not only exacerbated a severe housing shortage but took advantage of Angelenos at their most vulnerable time. California has clear laws to protect renters from such unscrupulous actions for a reason, and I will always enforce these laws to safeguard our communities.”
Feldstein Soto’s lawsuit accuses the group of advertising and engaging in the short-term rental of dozens of properties for thousands of rental nights without City-required permits, including rent-stabilized units that cannot legally be used as short-term rentals. The Defendants allegedly used deceptive tactics, including fake host identities, and falsely advertised properties as being located outside of the City in Beverly Hills and West Hollywood to evade enforcement and continue profiting illegally.
According to the complaint, the Defendants include:
- Akiva Nourollah;
- Micah Hiller;
- Haim Amran Zrihen;
- Rachel Florence Saadat;
- Hiller Hospitality LLC, a California limited liability company;
- Hiller Hospitality Group LLC, a California limited liability company;
- 1070 Bedford LLC, a California limited liability company;
- Red Rock 70 LLC, a Nevada limited liability company registered with the California Secretary of State to do business in California; and,
- Coastal Charm LLC, a Nevada limited liability company registered with the California Secretary of State to do business in California.
In December of 2018, the City enacted the STR Ordinance to address the negative consequences of short-term rentals, which include the reduction of housing stock, increased nuisance activity, and a potential negative impact on neighborhood quality of life. The STR Ordinance went into effect on July 1, 2019, and prohibits any person from offering, advertising, booking, facilitating, or engaging in short-term rental activity in a manner that does not comply with the STR Ordinance.
The STR Ordinance requires that hosts may only offer their primary residence for short-term rentals and may only operate one short-term rental property at a time. In addition, units that are subject to the City’s Rent Stabilization Ordinance are not eligible for short-term rentals. To participate, eligible hosts must submit an application, pay an application fee, and obtain a registration number from the City’s Department of City Planning before engaging in short-term rentals. All advertisements for short-term rentals must clearly list the host’s City-issued HSR number. Hosts may not engage in short-term rentals for more than 120 days in a calendar year unless they obtain a separate registration number. Hosts must also pay a per-night fee to the City for each night of short-term rental and collect Transient Occupancy Taxes from their guests and remit them to the City.
The complaint alleges that since at least April 2022, Defendants have repeatedly violated the STR Ordinance and the UCL by advertising, booking, and receiving payment for thousands of nights of illegal short-term rental accommodations in the City. In addition to managing the advertising and booking of short-term rentals for third-party property owners, the Defendants allegedly advertised and booked short-term rentals at their own properties. And after the Palisades and Eaton wildfires broke out on January 7, 2025, Defendants allegedly expanded their illegal operation, offering and booking long-term rentals in violation of the Anti Price-Gouging Law, including for some of those same properties.
California enacted Penal Code section 396 - the Anti-Gouging Law - following the Northridge earthquake in 1994 to protect consumers from predatory pricing following a natural disaster. It is triggered automatically upon the declaration of a state of emergency during a natural disaster, such as the one made by Governor Newson on Jan. 7, 2025. Under the Anti-Gouging Law, it is illegal to increase the price of essential goods, like rental housing, by more than 10%.
According to the complaint, following the wildfires and urgent demand for housing, the Defendants illegally increased rent of some properties up to 113 percent higher than before the emergency.
Feldstein Soto encourages Angelenos who believe they are victims of price gouging to let the City know by submitting this complaint form or calling 311. Reports may be filed anonymously. She also encourages Angelenos to visit the LA City Emergency Management Department for the latest recovery resources.
The Public Rights Branch within the City Attorney’s Office is managing this litigation.
Case #25STCV07712
The People of the State of California vs. Akiva Nourollah, Micah Hiller, Haim Zrihen, Rachel Saadat, Hiller Hospitality LLC, Hiller Hospitality Group LLC, 1070 Bedford LLC, Red Rock 70 LLC, and Coastal Charm LLC.