Ultimate Host and its associated companies such as Nightfall Group have cultivated the reputation as brokers of the ultra-luxury lifestyle by providing short-term rentals of villas and mansions, but recent lawsuits allege the Beverly Hills-based company won’t pay its bills.
In the past 18 months, plaintiffs have filed at least seven lawsuits in Los Angeles Superior Court against Ultimate Host, helmed by CEO Mokhtar Jabli. About four lawsuits were filed this year.
A couple of the suits allege fraud on the part of Ultimate Host and its agents. Others allege the company would rent or sublet a mansion for five or six figures and then break the lease agreement. A lawyer representing Ultimate Host and a lawyer representing a plaintiff for one of the cases were unaware of any possible bankruptcies filed by the short-term rental company.
One recent suit, 5554 Green Oak LLC v. Ultimate Host, said the short-term rental company made an agreement to pay $30,000 a month for a high-end house in Sherman Oaks. The agreement started in November 2021. But in August 2022, the plaintiff said payments stopped. The plaintiff alleges that damages ratcheted up to a total of $116,135.92 in lost rent.
An attorney representing Ultimate Host said the company worked to resolve issues with its contractual responsibilities. “What has been alleged is that our client could not pay rent and returned the property to the landlord. After a few months of getting the property ready to re-rent, the landlord did so. The client turned over the property without making the landlord go through an eviction process,” said Ryan Davis, attorney with the firm Kesselman Brantly Stockinger.
Other suits allege that Ultimate Host participated in fraud. In one case, David Holden v Ultimate Host, a man living in the Cayman Islands signed a contract with Ultimate Host to rent a property in West Hollywood. The plaintiff signed a contract to pay $123,220, which included a $10,000 security deposit, for a one-week stay.
“(When they arrived) they were horrified by what they found,” the lawsuit states regarding the plaintiff’s family. “Construction on the property was unfinished; there were exposed wires hanging from the ceiling and the walls; the air conditioning did not work properly; the front and rear doors could not be locked and the rear door was not secure; there was no gas running to the property and a glass panel was missing from the balcony.”
The plaintiff was moved to another Ultimate Host rental in the Sunset Strip area. That place also was deemed uninhabitable. The company then moved the plaintiff’s family to a hotel. The suit alleges Ultimate Host did not refund the entire contract. Plaintiff is suing to regain what he spent on the Los Angeles area rental. An attorney representing Ultimate Host did not reply to a request for comment.
Short-term rentals are big business in Los Angeles; landlords took in more than $1 billion in 2022, according to market research group AirDNA. However, the market has changed since the City of Los Angeles’ ULA transfer tax went into effect on April 1, said Patrick Michael, founder of the firm LA Estate Rentals.
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“There’s too much inventory now. People shifted a lot of inventory from sales to leases and short-term rentals. There’s more competition. Everyone is lowering their prices,” he said.
Previously, many landlords charged $100,000 per month for pricey rentals. Now prospective renters are shopping for discounts and requesting rents of $40,000 to $60,000 per month, Michael said.