Attorney General Bonta Announces Settlement with Green Valley Corporation over Violations of the California Tenant Protection Act

Represents first public action by Attorney General’s office enforcing Tenant Protection Act, brings financial relief to impacted individuals

SAN FRANCISCO – California Attorney General Rob Bonta today announced a settlement against Green Valley Corporation, a San Jose-based housing developer and property manager also known as Swenson Builders, to resolve allegations that the company violated the California Tenant Protection Act (TPA) by issuing unlawful rent increases to nearly 20 of its employee tenants and serving unlawful eviction notices to six of those employee tenants. Co-authored by Attorney General Bonta during his time as a state assemblymember, the TPA was signed into law by Governor Gavin Newsom in 2019. It created significant new protections for most tenants, including limiting rent increases and prohibiting landlords from evicting tenants without just cause. As part of the settlement, Green Valley will pay a total of $391,130 and be required to take specific actions to ensure compliance with the TPA.

“I co-authored the Tenant Protection Act during my time as an assemblymember because of the urgency of California’s housing crisis. As Attorney General, I still feel that same sense of urgency, making today especially meaningful,” said Attorney General Bonta. “Today’s settlement represents the first public action by the California Department of Justice in which it is enforcing the Tenant Protection Act. Because of that critical legislation, impacted Green Valley employee tenants are getting financial relief. In addition, they are being protected from skyrocketing rent increases and evictions without just cause, including pretextual evictions that do not meet the Act’s requirements. There should be no doubt: Tenants have housing rights in California, and we have your back.”
 
While Green Valley rents most of its properties to tenants with no employment affiliation with it, it also has some employee tenants, for whom it was keeping rents well below market rates. However, after receiving credible complaints in late 2021 about employee-tenant rent increases, the California Attorney General’s Office launched an investigation into Green Valley. The investigation revealed that Green Valley’s rent increases violated the TPA’s rent-increase cap for nearly 20 employee tenants, whose rents were increased by an average of 151%, and that Green Valley sent eviction notices to six of those employee tenants that failed to meet the TPA’s requirements for just cause evictions. 
  
Under today’s settlement, Green Valley:

• Must pay $391,130, comprised of $60,000 in penalties and $331,130 in restitution to 17 employee tenants who were impacted by its acts. Specifically, Green Valley is refunding 15 months of overpaid rent to the employee tenants who paid the unlawful increases. For the employee tenants who moved out due to the rent increases or eviction notices, Green Valley will pay 15 months’ worth of the difference between their lawful rent amounts and the estimated fair market value of the new units to which they relocated.
• Has already restored, as a result of this investigation, lawful rental rates for the three employee tenants who paid the unlawful rent increases and continue to rent from Green Valley;
• Cannot retaliate against its employee tenants;
• Must provide annual trainings, for the next five years, to relevant staff about landlord-tenant and fair housing laws as well as provide annual reports to the California Attorney General’s office regarding those trainings as well as regarding any rent increases and eviction notices to any employee tenants;
• Must fully comply with the TPA and other California tenant protection laws; and  
• Must provide its employee tenants with the same rights and protections granted to other tenants, such as those provided by the TPA. 

Employee tenants — individuals who both work for and have residential leases with a company — are not exempted from coverage under the TPA. The TPA prohibits landlords from raising rent more than 10% total or 5% plus the percentage change in the cost of living, whichever is lower, over a 12-month period. It also requires landlords to have just cause for eviction and specifies what constitutes a just cause. For example, a landlord may evict a tenant if they intend to substantially remodel the property. However, substantial remodel requires the replacement or substantial modification of structural, electrical, plumbing, or mechanical systems that requires a government permit, or the abatement of hazardous materials, that cannot reasonably be accomplished safely with the tenant in place and requires the tenant to vacate the unit for 30 or more days. A landlord should therefore be able to show that they obtained estimates from licensed contractors about the scope and duration of work, that they obtained permits for the work, and that the work could not be performed safely and diligently without requiring the tenant to vacate for at least 30 days.
 
Attorney General Bonta remains committed to upholding protections for California renters. In May 2023, he filed a lawsuit against the City of Elk Grove, challenging the city’s denial of a proposed supportive housing project in the city’s Old Town Special Planning Area. In March 2023, he filed a lawsuit against the City of Huntington Beach for violating state housing laws. In July 2022, he issued legal guidance about steps law enforcement officers should take to prevent and respond to unlawful lockouts and self-help evictions. In April 2022, he issued a consumer alert reminding California’s tenants of their rights and protections under state law. In November 2021, he announced the creation of a Housing Strike Force — now called the Housing Justice Team — within the California Department of Justice.
 
Members of the public are encouraged to visit the California Department of Justice’s Housing Portal and HCD’s website for more resources and information aimed at supporting access to housing. If you believe your landlord has violated the law, you can file a report online at www.oag.ca.gov/report. Tenants who need legal help are encouraged to visit www.lawhelpca.org to find legal aid resources in their communities.
 
A copy of the complaint and judgment, which details the aforementioned settlement terms, can be found here and here.