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A Humboldt County Superior Court judge today issued a temporary restraining order against Eureka property owner Anil Dwivedi and his company, Dwivedi Tower, LLC, preventing them from implementing illegally large rent increases on tenants of the Hillsdale Apartments, a three-story apartment building he owns on E Street in Eureka.

The order also restrains Dwivedi and his company from evicting tenants without just cause and refusing to provide relocation assistance as required by law. 

Dwivedi’s attorney, Randall Davis, told Judge John T. Feeney that his client has already orally rescinded the rent-increase notices he’d issued to plaintiffs Don Swall and Vanessa Vachon, who live in the Hillsdale Apartments.

“I don’t think that a restraining order is necessary,” Davis said. “As early as today, I believe, Mr. Dwivedi is going to serve all the other tenants at Hillsdale with notices that will explain to them that the rent is increasing in April, but only by 8.8 percent.” That’s the maximum amount that rent can be increased in Humboldt County during any 12-month period for tenants who have lived in their residence for at least a year, per the terms of the California Tenant Protection Act.

Davis said Dwivedi has also agreed to cancel any and all lease agreements that tenants signed agreeing to much larger rent increases. He asked Judge Feeney to omit another apartment building Dwivedi owns — the Eureka Central Residence at 333 E Street — from any court order since rents there are dictated by the U.S. Department of Housing and Urban Development (HUD). 

Plaintiffs Swall and Vachon were represented by Jeffrey Slack and Megan Yarnall with the Eureka firm of Janssen Malloy, LLP, and in response to Davis’s arguments, Slack said Dwivedi’s stated intentions aren’t good enough. 

“The key word that I heard in Mr. [Davis’s] argument is ‘will,’” Slack said to Judge Feeney. “Relief is still needed today.”

Slack went on to argue that some tenants signed leases with unlawful rent increases while others have refused to sign, and those tenants may still be vulnerable to eviction without a restraining order.

“What we’re asking the court to do is to make assurances to these tenants so they’re not faced with an impossible choice of trying to scrape enough money to [pay for] an unlawful rent increase, or else be evicted from their homes, which in some cases they’ve resided in for over 10 years now,” Slack said.

“Many of these folks are low income and elderly,” he continued. “We haven’t had anything in writing from defendants today … indicating that they will not be evicted come Friday of this week.”

As previously reported, tenants at the Hillsdale Apartments received notices on their doors late last month informing them that Dwivedi Tower, LLC, would implement new leases on March 1 with new rent amounts of $1,065 or $1,132, which represented an increase of anywhere from 30 percent to 80 percent or more. The notice said that any tenant who didn’t agree to those terms “can choose to vacate the property on or before February 28th.”

Judge Feeney said he was encouraged to see that matters appear to be heading toward a resolution.

“But at this point I find that the potential harm to the plaintiffs outweighs the potential harm to Mr. Dwivedi,” he said. “The plaintiffs could lose their homes for not agreeing to what appears to the court to be unlawful rent increase demands.”

Feeney agreed to issue the temporary restraining order, though it will pertain only to the Hillsdale Apartments and not the Eureka Central Residence.

After the hearing, Slack and Yarnall discussed the case with the Outpost back at the Janssen Malloy office up the street. They said that the case came to them via a social worker with Humboldt County’s Adult Protective Services program, who was concerned about possible exploitation of the elderly after reading the story we published on Feb. 7.

After their firm filed the request for a temporary restraining order on Friday, Davis reached out to say that Dwivedi had “seen the light” and agreed to rescind the rent increases, according to Slack.

“I said, ‘Get me something in writing; that’s a start,” he said.

“We’re really concerned about the whole building, not just our two clients,” Yarnall said. She said there are at least three categories of clients: those like Swall and Vachon, who held their ground and refused to sign the new lease terms; those who agreed to sign the new leases and may have already paid the excessive rents; and, lastly, those who were so intimidated by the new rent demands that they’re planning to move out — or perhaps already have.

“In some ways, those are the people I’m most concerned about,” Yarnall said. “They need relief now. They need to know from the court, ‘Hey, you don’t have to move out.’”

With the class action suit filed last week, Slack and Yarnall hope to ensure that Dwivedi not only rescinds the inflated new lease terms but also that he pays restitution and damages to any tenants who paid the higher amounts or spent money moving out.

“It’s not good enough to just say, ‘We’re not going to continue to charge these [unlawful rent amounts]; he needs to make these people whole,” Yarnall said.

When the Outpost interviewed Dwivedi earlier this month, he argued that the new lease terms he was trying to impose were not illegal because his tenants agreed to them. He pointed to a section of the notice he posted that said tenants have the right to review the proposed new lease carefully and to “negotiate lease terms within reasonable limits.”

But Slack said that notice itself was a violation of the Tenant Protection Act, which includes specific provisions that spell out exactly what information landlords must disclose to tenants about their rights when implementing a rent increase. And those tenants’ rights cannot be waived.

Yarnall agreed. “There’s a huge power dynamic imbalance between the tenants and the landlord,” she said. “And so saying to them, you know, buried in a in a scary notice, ‘By the way, if you don’t like this, you should speak up,’ it’s just not enough.”

Slack and Yarnall said that any residents of the Hillsdale Apartments who agreed to move out or who signed unlawful new leases can call Janssen Malloy and speak to them.

Judge Feeney scheduled a preliminary injunction hearing in the class action suit for March 10 at 10:30 a.m.