Chapter 14.04
RESIDENTIAL RENT MEDIATION AND ARBITRATION

Sections:

14.04.010    Purpose.

14.04.020    Definitions.

14.04.030    Rent mediation board created – Composition.

14.04.040    Appointment of members – Terms – Removal.

14.04.045    Forfeiture of office.

14.04.050    Qualifications.

14.04.055    Ex officio member.

14.04.060    Compensation.

14.04.070    Meetings – Quorum – Rules of procedure.

14.04.075    Secretary and minutes.

14.04.080    Matters subject to mediation.

14.04.090    Notification of rent increases.

14.04.100    Mediation of rent increases – Hearings.

14.04.110    Consolidated hearings.

14.04.120    Role of attorneys.

14.04.130    Recommendations.

14.04.140    Acceptance or modification of recommendations.

14.04.150    Failure to accept recommendations.

14.04.160    Hearing – Procedure.

14.04.170    Hearings.

14.04.180    Standards for review.

14.04.190    Determination of hearing officer.

14.04.200    Costs of hearing.

14.04.210    Effective date of rent increases.

14.04.220    Applicability.

14.04.230    Retaliatory acts.

14.04.240    Lessors’ rights.

14.04.250    Repossession of dwellings.

14.04.260    Remedies for retaliatory evictions.

14.04.270    Enforcement.

14.04.280    Notice of mediation and arbitration procedures.

14.04.290    Reports.

14.04.300    Severability.

    Prior ordinance history: Ordinances 1180, 1303, 1330 and 1375.

14.04.010 Purpose.

The council finds and declares that there is presently within the city a shortage of residential rental units and a low vacancy rate resulting in a rapid increase in rents, thus causing an economic hardship to tenants residing in the community. The council is desirous of protecting such tenants from unreasonable rent increases while permitting the owners of such properties to receive rent allowing them to maintain the units as well as to receive a reasonable return on their property. The council has therefore determined that it is in the interests of the city to assist tenants and owners in resolving disputes which, from time to time, may arise. (Prior code § 12-1.101)

14.04.020 Definitions.

“Board” means the Gardena rent mediation board.

“Consumer Price Index” shall mean the Consumer Price Index for all Urban Consumers, Los Angeles-Riverside-Orange County, California, published by the U.S. Department of Labor, Bureau of Labor Statistics.

“Hearing” means a process conducted to make a decision based on evidence taken before a hearing officer who makes findings of fact, conclusions of law and renders a decision that is reviewable in accordance with the provisions contained in Section 1094.5 et seq. of the Code of Civil Procedure of the state.

“Hearing officer” means a neutral officer selected in accordance with the provisions of this chapter charged with conducting a hearing in accordance with Sections 14.04.170 through 14.04.190.

“Mobile home” shall mean a structure designed for human habitation and for being moved on a street under permit, pursuant to California Vehicle Code Section 35790. “Mobile home” includes a manufactured home, as defined in California Health and Safety Code Section 18007, and a mobile home, as defined in California Health and Safety Code Section 18008.

“Mobile home homeowner” shall mean a person who owns a mobile home located in a mobile home park under a rental agreement that is not otherwise exempt from regulation under this chapter pursuant to California Civil Code Section 798.17 or 798.45.

“Mobile home park” shall mean any area of land within the city where two or more mobile home spaces are rented, or held out for rent, to accommodate mobile homes used for human habitation.

“Owner” means the owner, lessor, sublessor, or any other person entitled to receive rent for the use and occupancy of any rental unit or an agent, representative or successor of any of such persons.

“Rent” means the consideration demanded or received in connection with the use and occupancy of any rental unit or for the transfer of a lease for occupancy.

“Tenant” means the lessee and/or any person entitled to occupy a rental unit under a rental or lease agreement with the owner of such rental unit. (Ord. 1761 § 1, 2015: prior code § 12-1.102)

14.04.030 Rent mediation board created – Composition.

The Gardena rent mediation board is created. The board shall consist of fifteen members comprised of five tenant members, five owner/manager/real estate professional members, and five members-at-large. (Prior code § 12-1.103)

14.04.040 Appointment of members – Terms – Removal.

A. Each councilmember shall appoint one member from each of the three member groups set forth in Section 14.04.030.

B. The term of office for each member of the board shall be coterminus with the expiration of the actual tenure of the member of the council who appointed the member.

C. Each member shall serve at the pleasure of the council, and any member may be removed from office with or without cause by a majority vote of the membership of the council.

D. All members shall serve until their respective successors are appointed.

E. Members may be reappointed.

F. Vacancies existing due to removal, resignation, death or changed status as to a membership group shall be filled for the unexpired portion of the term by the councilmember originally appointing the vacating member. (Ord. 1670 § 20, 2005; Ord. 1548 § 7, 1998: prior code § 12-1.104)

14.04.045 Forfeiture of office.

Notwithstanding any other provision of this chapter, any member of the board (excepting a nonvoting member) who is absent from any three consecutive regular meetings of the board or who is absent from a total of six regular meetings of the board in any twelve-month period shall thereby automatically forfeit the position or office as a member of the board and the name of such person shall be automatically removed from the membership of the board immediately after the adjournment of any such third consecutive regular meeting or of any such six regular meetings in any such twelve month period, as the case may be, at which such member has not appeared.

The secretary of the board shall thereupon promptly notify the council of such fact, whereupon the vacancy so created shall be filled by appointment as set forth in Section 14.04.040 for the remainder of the unexpired term. (Ord. 1670 § 21, 2005)

14.04.050 Qualifications.

A. All tenant members shall be tenants of residential rental property within the city, and neither the tenant member, spouse, nor dependents shall have any financial interest in residential income-producing property either in the city or elsewhere.

B. All owner/manager/real estate professional members shall own, manage, or have a residential income-producing property interest within the city and preferably shall be residents of the city.

C. Members-at-large shall not be tenants, nor shall they have an ownership interest in any residential income-producing property in the city. It is preferable that neither members-at-large nor their spouses or dependents shall have any direct business or financial relationship with either landlords, property managers or real estate professionals within the city or elsewhere. (Prior code § 12-1.105)

14.04.055 Ex officio member.

To aid and assist the board in its deliberations, the city manager, or the city manager’s designated representative, shall serve as an ex officio member of the board and shall have no voting power. (Ord. 1670 § 22, 2005)

14.04.060 Compensation.

The members of the board shall receive such compensation as determined by resolution of the city council. (Prior code § 12-1.106)

14.04.070 Meetings – Quorum – Rules of procedure.

The board shall meet regularly once each month at a time and place within the city to be decided upon by the board. A majority of the board members, to include at least one member from each membership category, shall constitute a quorum. All regular board meetings shall be open to the public. The board shall establish rules of procedure for its regular meetings and for mediations conducted by the board. Such rules and all changes and additions thereto shall be submitted to and subject to approval by the council prior to taking effect. (Prior code § 12-1.107)

14.04.075 Secretary and minutes.

A. The city manager, or the city manager’s designee, shall serve as secretary to the board and to any of its committees, and accurate minutes of the activities of the board shall be maintained by the secretary. Minutes shall include the following subject matter:

1. The time and place of each meeting of the board;

2. The names of the members present;

3. All official acts of the board;

4. The votes given by the members, except when the action is unanimous; and

5. A summary of all proceedings before the board.

B. All minutes shall be reduced to writing and shall be presented to the board at the earliest reasonable time for approval, amendment, or correction. The minutes, or true copies thereof, shall be open to public inspection. Copies of the minutes shall be furnished to the council, members of the board, and any other public official upon request. (Ord. 1670 § 23, 2005)

14.04.080 Matters subject to mediation.

The board shall provide mediation services regarding claims that rent increases in the amounts specified in Sections 14.04.090(D) and (E) are excessive or unjustified. No other matter shall be within the jurisdiction of the board. (Ord. 1761 § 2, 2015: Ord. 1709 § 1, 2008: prior code § 12-1.108)

14.04.090 Notification of rent increases.

A. An owner shall provide written notice to tenants of an increase of ten percent or less of the rent charged during the twelve months prior to the effective date of the increase at least thirty days prior to the effective date of the increase.

B. If the proposed rent increase is greater than the amount described in subsection A of this section, the owner shall provide written notice of the increase to tenants at least sixty days prior to the effective date of the increase.

C. Notwithstanding subsection A or B of this section, mobile home park management shall provide homeowners written notice of any rent increase at least ninety days prior to the effective date of the increase.

D. Notice of any rent increase exceeding five percent of the rent charged during the twelve months prior to the effective date of the increase shall include a notice to the tenant, including a mobile home homeowner, of the right to mediation/hearing and that the tenant has ten business days following service of the notice, or twenty-five business days for a mobile home homeowner, to file a mediation petition in order to exercise the tenant’s rights under this chapter. If service is by mail, service shall be effective five days from the date of mailing, or two days in the case of Express Mail, in accordance with Code of Civil Procedure Section 1013.

E. Notice of any rent increase to a mobile home homeowner in a mobile home park shall include a notice to the mobile home homeowner of the right to mediation/hearing and that the mobile home homeowner has twenty-five business days following service of the notice in accordance with California Civil Code Section 798.14 to file a mediation petition in order to exercise the mobile home homeowner’s rights under this chapter. If service is by mail, service shall be effective five days from the date of mailing, or two days in the case of Express Mail, in accordance with Code of Civil Procedure Section 1013. Such notice of the right to mediation/hearing need not be given, and the right to mediation/hearing shall not be applicable to, any rent increase in an amount less than one-half of the percentage increase in the Consumer Price Index from the most recently published index available ninety days prior to the date that the mobile home homeowner’s then current rent was first effective to the date of the most recently published index at the time the notice is given. (Ord. 1768 § 1, 2016; Ord. 1761 § 3, 2015: Ord. 1709 § 2, 2008: Ord. 1626 § 1, 2003; prior code § 12-1.109)

14.04.100 Mediation of rent increases – Hearings.

A. If, within twenty-five business days after the receipt of a notice of an increase in rent to a mobile home homeowner in a mobile home park, or within ten business days after the receipt of a notice of an increase in rent to any other tenant, a petition for mediation is filed by a tenant of a dwelling unit subject to the rental increase, then a mediation hearing shall be set within thirty days after such filing.

B. The hearing shall be conducted by a panel composed of three board members, one from each membership group. The member-at-large shall act as chairperson. If both parties consent in writing, the composition of the panel as set forth in this subsection may be waived.

C. The panel may require the landlord to provide specific documents and information in order to determine whether the proposed rent is reasonable and fair. If the landlord fails to submit documents and information within ten business days of the mailing of the panel’s notice to provide such documents and information, the mediation hearing shall be cancelled and the notice of increase of rent shall be void for all purposes. The documents may include, but are not limited to, the following:

1. The actual operating expenses by category for the rental unit for a two-year period ending no more than four months before the proposed effective date of the increase;

2. The anticipated expenses for the rental unit for the twelve-month period of the proposed increase, including details of changes in any cost element;

3. The current and proposed rent schedule for the controlled rental unit;

4. A schedule of other fees and income from the rental unit;

5. The vacancy rate of each rental unit during the preceding two-year period;

6. The schedule of current leases for rental units affected by the proposed increase extending beyond the effective date of the increase, showing the number of leases expiring each month; and

7. The details of any other factor affecting the need for the proposed rent increase.

D. A notice setting the time and place of the mediation hearing and a list of any materials requested by the panel shall be prepared by the board and served upon all parties. A copy of the petition initiating the mediation shall be served with such notice. Such service shall be made by mail to the addresses provided in the petition not less than ten days prior to the hearing. Service of the notice upon the resident manager on the premises or upon the person named in notices posted pursuant to Section 1962 of the Civil Code of the state shall be deemed to be service upon the landlord.

E. The mediation hearing shall not be open to the public.

F. If the tenant who petitioned for mediation, or the spokespersons designated pursuant to Section 14.04.110, fail to appear at the time and place of the hearing, the rent increase shall be deemed approved and shall take effect as provided in Section 14.04.210(C). If the landlord fails to appear at the time and place of the hearing, the rent increase shall be void, subject to the landlord’s issuance of a new notice of rent increase pursuant to Section 14.04.090, which shall be subject to all rent mediation and hearing procedures set forth in this chapter. (Ord. 1761 §§ 4, 5, 2015; Ord. 1709 §§ 3, 4, 2008; Ord. 1626 § 2, 2003; prior code § 12-1.110)

14.04.110 Consolidated hearings.

A. Whenever more than one petition for mediation has been filed with respect to rental units which are under common ownership or management and which are operated as a single housing complex, including a mobile home park, such requests, on order of the city or chairperson, may be consolidated for hearing.

B. Whenever two or more petitioners have joined in a consolidated hearing, they may elect up to three spokespersons to represent their interests during the hearing and to enter into a binding agreement. (Ord. 1626 § 3, 2003; prior code § 12-1.111)

14.04.120 Role of attorneys.

A. No attorney shall take part in any mediation hearing unless:

1. The attorney is the owner, manager, or tenant of the dwelling unit which is involved in the mediation; or

2. The owner, manager, or tenant of the dwelling unit involved in the mediation is a part-

nership in which the attorney is a general partner and in which all the partners are attorneys; or

3. The owner, manager, or tenant of the dwelling unit is a corporation, and the attorney is an officer or director of the corporation, and all of the officers and directors of the corporation are attorneys.

B. Nothing set forth in this section shall prevent an attorney from rendering advice to a party participating in a mediation hearing, either before or after commencing the mediation process; nor shall anything set forth in this section prevent an attorney from testifying to facts of which he has personal knowledge and about which he is competent to testify. Nothing set forth in this section shall prevent the city attorney or his designee from advising the board or its members as to any matter relating to the performance of the duties of the board or its members.

C. Any person may be represented by an agent other than an attorney in the mediation hearing provided such agent is granted authorization to do so in writing, and the authorization includes authority to enter into a binding settlement of the dispute being mediated.

D. Attorneys may be appointed board members and may sit on a mediation panel. (Prior code § 12-1.112)

14.04.130 Recommendations.

Within seven business days after the conclusion of a rent mediation hearing, the board shall issue its recommendation and mail a copy of such recommendation to the owner and tenant or tenants affected by or subject to the recommendation. (Ord. 1626 § 4, 2003; prior code § 12-1.113)

14.04.140 Acceptance or modification of recommendations.

If the parties accept the recommendations of the board, they shall affix their signatures in the space provided thereon, which shall indicate that the rent for such unit shall be that contained in the recommendation, or any other amount mutually agreed upon by the parties, and shall remain the same for a period of no less than six months. It is the intent of the council that such document shall constitute a binding contract between the parties and shall be enforceable by each party in a court of law. (Prior code § 12-1.114)

14.04.150 Failure to accept recommendations.

If the parties do not accept the recommendation of the board or agree upon another rental amount, either party, within seven calendar days after the mailing of the recommendation of the board, may file with the board a request to submit the matter to a hearing officer whose decision shall be binding on the parties. (Ord. 1761 § 6, 2015: prior code § 12-1.115)

14.04.160 Hearing – Procedure.

Upon the receipt of a request to submit the matter to a hearing officer, the board shall notify the parties of the request and shall submit to them the name of a hearing officer, accompanied by his resume and fee. If the parties agree upon the hearing officer, they shall notify the board in writing of such acceptance. If either party fails to agree upon a hearing officer, a new name shall be submitted until such time as both parties agree upon a hearing officer. If, after three names are submitted, both parties are unable to agree on a hearing officer, the board will unilaterally assign a hearing officer to hear the case. Failure to notify the board within three days after the receipt of the name shall constitute acceptance of the hearing officer. (Ord. 1761 § 7, 2015: prior code § 12-1.116)

14.04.170 Hearings.

A. The city shall notify both parties of the time and place for the hearing. Such time shall be not less than seven or more than thirty calendar days after the date of the notice of hearing was sent to the parties by the board. The hearing shall take place in the city or any other mutually agreeable location and shall not be open to the public. The parties at the hearing may produce oral or documentary evidence. Cross examination of witnesses shall be permitted. The conduct of the hearing shall be under the control of the hearing officer, with due regard to the rights and privileges of the parties appearing before it. Hearings need not be conducted according to technical rules relating to evidence and witnesses.

B. The parties may be represented at the hearing by an attorney or other agent.

C. The parties may present any relevant evidence to the hearing officer.

D. The complete file, including the recommendation and all correspondence to and from the board relating to the case shall be made available to the hearing officer.

E. Such hearings may be consolidated by the hearing officer pursuant to Section 14.04.110.

F. The hearing officer shall have the power to subpoena witnesses and documents. (Ord. 1761 § 8, 2015: Ord. 1626 § 5, 2003; prior code § 12-1.117)

14.04.180 Standards for review.

In making a decision based on a petition for rent review, the hearing officer shall consider the purposes of this chapter and shall specifically consider all relevant factors to determine whether the proposed rent increase is just, fair and reasonable, including, but not limited to, the following:

A. Changes in the Consumer Price Index;

B. Any lawfully established state or federal government wage and price guideline;

C. The rent lawfully charged for comparable rental units in the city;

D. The length of time since the last increase for the rental unit or units for which the owner seeks a rent increase;

E. The completion of any capital improvement or rehabilitation work related to the rental units, as distinguished from normal repair, replacement or maintenance, and the cost thereof, including such items of cost as materials, labor, construction interest, permit fees, a fair return on the capital investment and other items as the hearing officer deems appropriate;

F. Changes in property taxes, other taxes, or fees, related to the subject rental unit or units;

G. Changes in mortgage payments or rent paid by the owner for the rental unit or units or the lease of the land upon which such units are located;

H. Changes in the utility charges for the rental unit or units paid by the owner and the extent, if any, of reimbursement from the tenants;

I. Changes in reasonable operating and maintenance expenses, including, but not limited to, insurance, government assessments, materials and services;

J. The need for repairs caused by circumstances other than ordinary wear and tear;

K. The amount and quality of services provided by the owner to the affected tenant or tenants;

L. Changes in the size of the rental unit or units;

M. Compliance by the owner with applicable housing, health, and safety codes; and

N. Any existing written lease lawfully entered into between the owner and the affected tenant or tenants and any leasehold obligations of the landlord which affect the property. (Ord. 1761 § 9, 2015: Ord. 1626 § 6, 2003; prior code § 12-1.118)

14.04.190 Determination of hearing officer.

The hearing officer, within ten business days after the conclusion of the hearing, shall certify his findings and decision to the parties, the board, and the city council. The decision of the hearing officer shall be final subject to judicial review pursuant to Section 1094.5 of the California Code of Civil Procedure and further subject to the time limits for seeking such review pursuant to Section 1094.6 of the Code of Civil Procedure. (Ord. 1761 § 10, 2015: Ord. 1626 § 7, 2003; prior code § 12-1.119)

14.04.200 Costs of hearing.

The costs of the hearing shall be paid one-half by the owner and one-half by the tenants. In cases where either party has proceeded in bad faith or in an unfair manner, or where the submissions of the party as to the proper rent are totally at odds with the facts, the hearing officer may alter the distribution of costs in any manner whatsoever. (Ord. 1761 § 11, 2015: prior code § 12-1.120)

14.04.210 Effective date of rent increases.

A. No rent increase shall be effective unless or until the owner or manager of the rental unit, or the owner’s duly authorized agent, complies with the provisions of this chapter by meeting in good faith with the tenant or tenants requesting mediation at such hearing and by participating in the hearing process.

B. The procedures of this chapter are intended to result in a final resolution of a dispute prior to the effective date of a rent increase. If board action or hearing does not result in a final decision by the effective date, any board recommendation or hearing officer’s decision shall be retroactive to the noticed effective date.

C. Failure of the tenant to file a request for mediation or a hearing in a timely manner as provided in this chapter shall result in the imposition of the rent increase on the effective date specified in the owner’s notice of such increase.

D. Nothing set forth in this chapter shall relieve a tenant of the obligation to pay the rent in effect prior to the notice of any increase. (Ord. 1761 § 12, 2015: prior code § 12-1.121)

14.04.220 Applicability.

The provisions of this chapter shall govern all disputes arising out of rent increases noticed on or after February 20, 1987. Rent increases for which notices were received on or after February 20, 1987, shall not take effect less than sixty days after the date such notice is received by the affected tenant or tenants. (Prior code § 12-1.122)

14.04.230 Retaliatory acts.

The use of the rent mediation or hearing process is declared to be a protected right pursuant to subsection (c) of Section 1942.5 of the Civil Code of the state. It is unlawful for a lessor to increase rent, decrease services, cause a lessee to quit involuntarily, bring an action to recover possession, or threaten to do any of such acts for the purpose of retaliating against the lessee because he has lawfully and peaceably exercised any right established by the city rent mediation and hearing process as set forth in this chapter. In any action brought by or against the lessee, the lessee shall bear the burden of producing evidence that the lessor’s conduct was, in fact, retaliatory. However, any action brought by the owner within three months after the determination of a petition filed with the board shall be presumed to be retaliatory. This presumption affects the burden of proof and is rebuttable by the owner. (Ord. 1761 § 13, 2015: prior code § 12-1.123)

14.04.240 Lessors’ rights.

Nothing in this chapter shall be construed as limiting in any way the exercise by the lessor of his rights under any lease or agreement or any law pertaining to the hiring of property or his right to do any of the acts described in Section 14.04.230 for any lawful cause. Any waiver by a lessee of his rights under this chapter shall be void as contrary to public policy. (Prior code § 12-1.124)

14.04.250 Repossession of dwellings.

Notwithstanding the provisions of Sections 14.04.230 and 14.04.240, a lessor may recover the possession of a dwelling and do any of the other acts described in Section 14.04.230 if the notice of termination, rent increase, or other act and any pleading or statement of issues in a hearing, if any, states the ground upon which the lessor, in good faith, seeks to recover possession, increase rent, or do any of the other acts described in Section 14.04.230. If such statement shall be controverted, the lessor shall establish its truth at the trial or other hearing. (Ord. 1761 § 14, 2015: prior code § 12-1.125)

14.04.260 Remedies for retaliatory evictions.

Any lessor or agent of a lessor who violates Section 14.04.230 shall be liable to the lessee in a civil action for all of the following:

A. The actual damages sustained by the lessee;

B. Punitive damages in an amount of not less than one hundred dollars nor more than one thousand dollars for each retaliatory act where the lessor or agent has been guilty of fraud, oppression or malice with respect to such act; and

C. Reasonable attorneys’ fees. (Prior code § 12-1.126)

14.04.270 Enforcement.

A. Violations of the provisions of this chapter shall not constitute a crime.

B. A tenant at any time may bring an action in the courts of the state alleging a violation by an owner of any of the terms of this chapter and may seek a court order requiring compliance with the provisions of this chapter.

C. An owner at any time may file an action in the courts of the state alleging a violation by the tenant of the provisions of this chapter or may seek a court order directing compliance with the provisions of this chapter. (Prior code § 12-1.127)

14.04.280 Notice of mediation and arbitration procedures.

The board shall prepare a booklet outlining the provisions of this chapter. Owners of residential rental units shall provide at least one booklet to the residents of each unit owned by them. New tenants shall be provided with a copy of the booklet at the time of occupancy. Notification of rent increases mailed on or after February 1, 1988, shall have no effect, and a tenant shall have a defense to any unlawful detainer action for failure to pay such increases in rent, if the tenant has not been provided with a booklet as required by this section. The burden of proof in disputes as to whether a booklet has been provided shall be on the landlord. Failure to provide a booklet may also be considered by the arbitrator in determining the distribution of costs pursuant to Section 14.04.200. A tenant’s signed statement, which may be included in the rental agreement, acknowledging that the owner has provided the tenant the booklet required by this section shall constitute proof of the owner’s compliance with this section. (Ord. 1709 § 5, 2008: prior code § 12-1.128)

14.04.290 Reports.

Reports of the results of all mediation hearings shall be made to the board and transmitted to the council. All such reports and the petitions for hearings shall be public records. The board, in addition to such reports, shall provide copies of the minutes of all board meetings to the council. (Ord. 1761 § 15, 2015: prior code § 12-1.129)

14.04.300 Severability.

If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this chapter, or any part thereof, is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this chapter or any part thereof. The city council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared unconstitutional. (Ord. 1761 § 16, 2015)