It means that if the property is subject to Los Angeles Housing Authority Rent Control.
See the link below.
It it VERY expensive (and almost impossible) to evict tenants, even for owner-occupation. That means if a lender is gong to minimize their loss they are not going to shell out thousands of dollars to deliver a rental property vacant.
It is typical for first time buyers to be totally unaware of these ramifications.
It's important to also understand that in the vast majority of these sales, there will be no opportunity for inspection prior to closing, therefore BUYER BEWARE. It would be fool hardy to purchase a property like this unless the discount is substantial enough to absorb the worst case scenario of both condition and eviction proceedings.
If the bank wants to sell you a home REO, make sure that it is delivered empty in broom swept condition. Otherwise, lower the asking price.
Over 1 Billion Sold
I'd suggest that before one estimates what "worst case scenario" costs for eviction proceedings that they seek the counsel of an attorney that specializes in eviction, and reference the specific address in your discussion. Different rules will apply to different areas. Santa Monica, for example, has it's own Rent Stabilization Ordinance, even though it's not in the LA City area.
Be careful out there!