Leason's three homes are in East Santa Ana Heights, an area that was annexed into Newport Beach about eight years ago.
In 2007, Newport Beach filed a criminal lawsuit against Leason; then in 2008, a civil lawsuit was filed for refusing to follow city zoning codes.
A settlement was reached in July with Leason and his estranged wife, Teresa Lu, who also divided up and rented her house, said City Atty. David Hunt.
But after verbally agreeing to the settlement, which included a $22,500 payout to the city, Leason refused to sign it, Hunt said.
The court then ordered Leason to pay the whole amount, including the fine and bring the homes up to code, Hunt said.
Claims against Lu were released after she agreed to the settlement and signed it.
Buck Johns, who has lived in the heights for about 33 years, said neighbors surrounding the homes, which are single-family use residences, began complaining five years ago that Leason was dividing up his homes.
"It was an effort to circumvent the zoning law," Johns said. "He turned the homes into apartments. He did that blatantly, and that's a blatant violation of what the single-family requirements are for that area."
Leason filed a lawsuit against Carrie Robbins, a resident who lives next door to one of his homes, her boyfriend, Micah Schwartz, and another neighbor, Paulette Dunn, for circulating a petition in 2005 that asked the city to look into the use of his properties.
"He filed for 16 causes of action, from trespassing to interfering with his business," Robbins said. "We were able to bring them down to five causes of action."
Leason began renovating and dividing up his homes before the city annexed the area, Robbins said.
In 1999, when she moved to her home, Robbins said Leason was renting out his homes, but major renovations began in 2003 when he bought the home next door to hers.
Robbins has an upcoming court date Nov. 1.