Chapter 14A
MOBILE HOME RENT STABILIZATION1
Sections:
14A.1 Findings and declaration of intent.
14A.4 Mobile home space rent increase limitations.
14A.5 Rent increase requirements.
14A.10 Increases subject to review.
14A.1 Findings and declaration of intent.
There is presently within the City of Gilroy an extreme shortage of developed spaces for the placement of mobile homes, and because of this shortage the vacancy rate for such spaces is nearly zero, if not nonexistent among most parks. With the widespread shortage of available spaces, rental increases within the last several years have been rapidly rising within a select number of parks.
After studying the city’s mobile home rental situation thoroughly, and then considering whether and what type of mobile home rent stabilization ordinance is needed in the City of Gilroy, this city council finds and declares it necessary, in the public interest, to facilitate and encourage fair bargaining between mobile home tenants and park owners in order to achieve a mutually satisfactory agreement regarding space rental rates in mobile home parks.
The intent of the city council in enacting this rent stabilization chapter is to curb excessive and unreasonable rent increases on mobile home park tenants, to prevent an exploitation of the current widespread shortage of available mobile home spaces within the City of Gilroy, to permit mobile home park owners to receive a fair and reasonable return, and to establish a process for rental increase disputes between park owners and tenants. (Ord. No. 87-17, § 2, 11-2-87)
14A.2 Definitions.
The following words and phrases when used in this chapter shall for the purpose of this chapter have the meanings respectively ascribed to them in this section:
“Affected tenants” means all tenants in a mobile home park who have been notified that a space rent increase is to become effective within the following twelve (12) months.
“Arbitrator” means a person who is neither a tenant (as defined within this chapter) nor who has an interest in a mobile home park of a nature that would require disqualification under the provisions of the Political Reform Act if the person were an elected state official; and a person whom the rent review officer determines meets one of the following criteria:
(1) Completion of a juris doctor or equivalent degree from a school of law and completion of a formal course of training in arbitration which, in the sole judgement of the rent review officer, provides that person with the knowledge and skills to conduct a space rent dispute arbitration in a professional and successful manner; or
(2) Completion of at least three (3) rent increase arbitration proceedings, or other public-related arbitration that involved issues the rent review officer considers similar to those raised in rent dispute arbitrations.
“Base rent” means the rent charged for a mobile home space on the effective date of this chapter; or rent charged for a space immediately following the transfer of ownership, vacancy due to eviction, vacancy due to a move off, or subsequent transfers of ownership; or the initial rent charged for a newly created space within an existing mobile home park.
“Capital improvements” means those improvements which materially add to the value of the property, appreciably prolong its useful life, or adapt it to new uses and which are required to be amortized over the useful life of the improvements of the building pursuant to the straight line depreciation provisions of the Internal Revenue Code, and the regulations issued pursuant thereto.
“Consumer price index” means the Consumer Price Index for all urban consumers for the San Francisco-Oakland Area, as published by the U.S. Department of Labor, Bureau of Labor Statistics.
“Landlord” means the mobile home park owner.
“Lease” means a written agreement between a landlord and a mobile home tenant for the use and occupancy of a rental space to the exclusion of others, and consistent with the provisions under Section 14A.3, subsection (c).
“Mobile home” means a structure transportable in one or more sections, designed and equipped to contain not more than one dwelling unit, and to be used with or without a foundation system.
“Mobile home park” means any parcel (or two (2) or more contiguous parcels) within the City of Gilroy where ten (10) or more mobile home spaces are rented or leased for the purpose to accommodate mobile homes used for human habitation.
“Mobile home space and/or lot” means a portion of a mobile home park designed or used for the occupancy of one mobile home.
“Operating expenses” means those operating expenses paid by the owner as described in Section 14A.8, subsection (a)(1).
“Park owner” and/or “owner” means the mobile home park owner(s).
“Rental agreement” means a lease, which is consistent with the provisions as stated under Section 14A.3(c).
“Rent increase” means any additional amount demanded of or paid by a tenant in excess of the rent paid for the mobile home space immediately prior to such demand or payment.
“Rent review officer” means the person or persons designated by the city administrator to administer and enforce the provisions of this chapter.
“Space rent” means any consideration required for the use and occupancy of a mobile home space in a park including all amenities, services, and benefits.
“Substantial rehabilitation” means work done by an owner to a mobile home space or to the common area of the mobile home park, exclusive of a capital improvement (as defined within this chapter) the value of which exceeds two hundred dollars ($200.00) and which is performed either to secure compliance with any state or local law or to repair damage resulting from fire, earthquake, or other casualty or natural disaster, to the extent such work is not reimbursed by insurance or security deposit proceeds.
“Tenant” means a tenant, subtenant, lessee, sublessee, or any other person entitled to the use or occupancy of any mobile home space under a rental agreement, lease, or other expression of tenancy. (Ord. No. 87-17, § 2, 11-2-87)
14A.3 Exemptions.
(a) The provisions of this chapter shall not apply to rent or rent increases for new mobile home parks created after the effective date of this chapter or new individual lots created (above the current number of total spaces within an existing park as of the effective date of this chapter) for a period of twelve (12) months.
(b) The provisions of this chapter shall not apply to rent or rent increases for new and/or relocated mobile homes placed on vacated lots for a period of twelve (12) months following the first day the lot is re-occupied.
(c) The provisions of this chapter shall not apply to any mobile home lot which is under a lease, voluntarily entered into between a landlord and a mobile home tenant where the lease meets all of the following criteria:
(1) The lease was entered into on or after the effective date of this chapter;
(2) The term of the lease is in excess of a thirty-six (36) month duration;
(3) The mobile home lot which is under the lease is used for the personal and actual residence of the mobile home tenant;
(4) The first paragraph of the lease contains a provision notifying the mobile home tenant that the mobile home lot will be exempt from the provisions of this chapter; and
(5) This exclusion shall apply only for the duration of the term of the lease and any uninterrupted, continuous extensions thereof. If the term of the lease is not extended and no new rental agreement meeting the above stated criteria is entered into, this chapter shall immediately become applicable to the mobile home lot and the last rental rate charged for the lot under the immediately preceding rental agreement shall be the rent for the purposes of determining the base rent under this chapter.
(d) The provisions of this chapter shall not apply to mobile home lots, for a period of twelve (12) months, immediately following:
(1) The transfer of ownership after the effective date of this chapter;
(2) For any subsequent transfers occurring after the effective date of this chapter; and
(3) A vacancy occurring because the prior mobile home tenant was evicted for nonpayment of rent, issuance by the tenant of checks drawn against insufficient funds or closed accounts, chronically late payment of rent, the tenant’s commission of waste upon the mobile home and/or lot, the tenant’s total disregard for maintenance, the tenant’s commission or permitting of a nuisance on the premises, the tenant’s use of the premises for an unlawful purpose, or other material violation of a reasonable provision of a written rental agreement. (Ord. No. 87-17, § 2, 11-2-87)
14A.4 Mobile home space rent increase limitations.
(a) Any rent increase (within any twelve (12) month period) which does not exceed five (5) percent of the base rent or eighty (80) percent of the change in the Consumer Price Index, whichever is less, shall not be subject to arbitration.
(b) Any rent increase (within any twelve (12) month period) which exceeds the maximum permitted under Section 14A.4(a) may be subject to a formal arbitration hearing under the provisions of this chapter.
(c) No rent increase increment which is in excess of the amounts specified in Section 14A.4(a) and subject to a formal review hearing, may become effective or be collected by the landlord until such time that the increase increment is approved under a formal review hearing by an arbitrator appointed by the city’s rent review officer. (Ord. No. 87-17, § 2, 11-2-87)
14A.5 Rent increase requirements.
(a) Except as otherwise provided within this chapter, the rent of any mobile home space shall not be increased more than once in any twelve (12) month period.
(b) All rent increase notices shall be given to the tenants on the same day each calendar year and subsequent years, although proposed increases may take effect on different dates. The purpose of this requirement is to avoid the possibility of multiple disputes over rent increases for the same park within a given year.
(c) A list of all mobile home tenants, with their respective space number denoted, receiving notice of rent increase shall be available to any tenant upon request.
(d) Whenever a landlord serves notice to a mobile home tenant of a proposed rent increase which exceeds the amounts specified in Section 14A.4(a), said notice shall include the following information:
(1) The name of the mobile home tenant occupying the rental space which is subject to the proposed increase;
(2) The mobile home space number and/or letter;
(3) A statement that the tenant has the right and may file a petition request for a formal rent review hearing with the city’s rent review officer. It shall also be stated that the petition must consist of signatures from not less than fifty-one (51) percent of the total mobile home park space registry (from those spaces where tenants are not under a rental agreement and/or lease as governed under Section 14A.3(c));
(4) A copy of Section 14A.4, entitled “Mobile Home Space Rent Increase Limitations,” shall be attached for reference;
(5) The Gilroy City Hall street address and telephone number of the city’s rent review officer; and
(6) A statement of the proposed rent increase expressed both as an actual dollar amount and as a percentage of the then current base rent.
(e) Whenever a landlord serves notice to a mobile home tenant of a proposed rent increase which exceeds the amounts specified in Section 14A.4(a), a copy of said notice shall also be sent to the city’s rent review officer. (Ord. No. 87-17, § 2, 11-2-87)
14A.6 Petition by tenants.
(a) A petition requesting an arbitration hearing shall include the signatures from not less than fifty-one (51) percent of the total mobile home park space registry (from those spaces where tenants are not under a rental agreement and/or lease as governed under Section 14A.3(c)); and shall be submitted to the city within thirty (30) days from the date the notice of rental increase was received by the rent review officer (as required under the provisions of Section 14A.5(e)). Said petition shall include all the following information:
(1) The printed names of all affected mobile home tenants with their respective space number denoted;
(2) The original petition signatures, with date of signature, from all affected tenants involved;
(3) The total number of mobile home rental spaces within the park; and
(4) The name, address and space number, and telephone number for the tenants’ representative and/or contact person. Tenants may designate an outside representative.
(b) Receipt of the Petition.
(1) Upon receipt of a completed written petition by tenants, as specified under Section 14A.6(a), the rent review officer shall within ten (10) working days assign an arbitrator. The rent review officer shall set a date for the arbitration hearing no sooner than ten (10) days nor later than thirty (30) days after the arbitrator has been assigned.
(2) The park owner and all affected tenants shall be notified immediately in writing by the rent review officer of the date, time, and place of the hearing.
(3) The notice of hearing shall be sent to all parties via first class mail.
(c) In the event a petition fails to meet all the submittal requirements listed in Section 14A.6(a), the rent review officer shall respond in writing with a statement of the listed deficiencies. The party filing the petition shall have fifteen (15) days to correct and refile the appeal. If the applicant(s) fail to meet the time limitation the petition shall be deemed to have been abandoned. (Ord. No. 87-17, § 2, 11-2-87)
14A.7 Arbitration hearing.
(a) The purpose of the hearing shall be to allow the two (2) parties the opportunity to present their differences concerning the proposed rent increase and settle them in a final manner.
(b) Both the park owner and the affected tenants may appear at the arbitration hearing and offer oral and/or documentary evidence. Both the park owner and the affected tenants may designate a representative to appear for them at the hearing.
(c) The arbitrator, as designated by the city’s rent review officer, shall use the standards of review outlined under Section 14A.8 for the hearing proceedings.
(d) The burden of proving the reasonableness of the proposed rent increase shall be on the landlord. The burden of proving service reductions shall be on the mobile home tenants alleging that service reductions have occurred.
(e) The arbitrator shall within fourteen (14) days of the hearing, submit a written statement of decision and reasons for the decision to the city’s rent review officer. Copies of the arbitrator’s decision shall be distributed by mail to the owner and all tenants.
(f) If the arbitrator’s determination is that the proposed space rent increase is not reasonable under the circumstances, then that portion of the proposed space rent increase which exceeds the amount allowed under Section 14A.4(a) shall be suspended. The determination shall be final and that portion of the increase greater than the amount stated under Section 14A.4(a) shall not be collected from the tenants by the park owner or his representative.
(g) If the arbitrator’s determination is that all or a portion of the proposed rent increase is reasonable under the circumstances, then the arbitrator shall grant all or such portion of the rent increase to be effective as of the time such increase would have been otherwise effective without the intervention of this chapter.
(h) The decision of the arbitrator is final and binding upon the owner and all affected tenants.
(i) Any party disputing the final decision and findings of the arbitrator may seek review of the arbitrator’s actions pursuant to Sections 1094.5 and 1094.6 of the California Code of Civil Procedures. (Ord. No. 87-17, § 2, 11-2-87)
14A.8 Standards of review.
(a) In evaluating any proposed space rent increase, which exceeds the maximum permitted under Section 14A.4(a), the following factors should be considered by the arbitrator:
(1) Unavoidable increases in maintenance and/or operating expenses, including but not limited to the reasonable value of:
a. The owner’s and/or landlord’s labor,
b. Any caretaker’s labor,
c. Increased costs for services provided by a public agency or public utility, and
d. Quasi-public agency and/or utility;
(2) The physical condition of the mobile home park and the amenities provided for each individual space, including the quantity and quality of maintenance and repairs performed during the preceding twelve (12) months;
(3) Substantial rehabilitation work that has been completed;
(4) Capital improvements that have been completed, as long as such work is:
a. Distinguished from ordinary repair and maintenance;
b. For the primary benefit, use, and enjoyment of the tenants;
c. Permanently fixed in place or relatively immobile and appropriate to the use of the property;
d. Cost factored and amortized over the good faith estimate of the remaining useful life of the improvement; and
e. Not coin-operated nor one for which a “use fee” or other charge is imposed on the tenants for its use;
(5) Increases or decreases in property taxes; and
(6) A fair and reasonable rate of return on the owner’s investment in the park, and other financial information which the park owner is willing to provide. (Ord. No. 87-17, § 2, 11-2-87)
14A.9 Arbitration fee.
(a) An initial cash deposit, set by resolution of the city council, shall be paid by the petition representatives. In addition, upon notice to the mobile home park owner of an impending hearing, the owner shall deposit like amount. The balance of hearing costs shall be paid equally between the petition tenants and the park owner within thirty (30) days from the final hearing. Any balance remaining will be refunded equally between the petition tenants and the park owner.
(b) Fees are due and payable on the date of petition submittal. Any park owner who receives a notice and payment statement from the city’s rent review officer (as required under Section 14A.6(b)(2)) shall pay the required fee within thirty (30) days or prior to the first arbitration hearing date, whichever comes first. A park owner who fails or refuses to pay the required arbitration fee under these time constraints shall be considered to have withdrawn the rental increase demand (only by the incremental amount which is in excess of the amount specified in Section 14A.4(a)). (Ord. No. 87-17, § 2, 11-2-87)
14A.10 Increases subject to review.
Except as hereinbefore provided, any space rent or combination of increases occurring after January 1, 1987, and prior to the effective date of this chapter, and any increase after the effective date of this chapter which taken together with any increase which took effect in the twelve (12) month period immediately preceding such increase, exceeds the limitations as specifically stated within Section 14A.4, shall be subject to the provisions of this chapter. (Ord. No. 87-17, § 2, 11-2-87)
Prior legislation: Ord. No. 87-16.