Chapter 19.14 MOBILEHOME PARK SPACE RENT STABILIZATION

A. In 1979, the people of the city of Cotati enacted by initiative a rent stabilization ordinance which had as its purpose the control and stabilization of rents charged by owners of residential rental property, including mobilehome parks. That rent stabilization ordinance has remained in effect to the present time. As to rents charged for mobilehome spaces in mobilehome parks, among others, the ordinance has achieved and continues to achieve its objective to control the amount of rent charged by mobilehome park owners for the rental of mobilehome spaces.

B. As the result of a settlement agreement entered into by and between the city and the petitioners in the case entitled 152 Valparaiso Associates, et al. v. City of Cotati, et al., the city council has placed the question of repealing the 1979 rent stabilization ordinance on the ballot for November 3, 1998. In the event the rent stabilization ordinance is repealed by the voters on November 3, 1998, the beneficial protections afforded by that ordinance to mobilehome owners will be eliminated. For the reasons stated herein below and those adduced during the public hearings concerning this chapter, the city council has determined that if the 1979 rent stabilization ordinance is repealed by the voters on November 3, 1998, as to mobilehome space rentals, it is necessary to replace same with this chapter.

C. The city council finds the following facts to be true and makes these factual findings in support of the adoption of the ordinance codified in this chapter:

1. Almost all of mobilehomes in the city are located in rented spaces in mobilehome parks.

2. In the city, there are three mobilehome parks containing one hundred seven spaces.

3. Mobilehomes in mobilehome parks provide an important alternative form of housing for city residents.

4. A significant number of mobilehome park residents are older individuals.

5. A significant number of mobilehome owners are on fixed incomes.

6. A significant number of mobilehome owners are low or lower income.

7. Nearly all mobilehome park residents own and occupy their mobilehomes and have made a substantial monetary investment to live in a mobilehome park.

8. Residents of a mobilehome park have very limited mobility due to the difficulty and expense of relocating a mobilehome.

9. There is a limited amount of alternative housing affordable to and suitable for the typical mobilehome park resident and mobilehome parks are a valuable resource of affordable housing.

10. The vacancy rate among mobilehome park spaces is zero percent. Given the low vacancy rate, it is extremely difficult for mobilehome owners to move their mobilehomes in the event they are evicted or must find alternative mobilehome spaces because of escalating and unreasonable rents being charged for the space where their mobilehomes are currently located. This has been especially true for elderly persons living on fixed social security or retirement incomes.

11. Without the city’s 1979 rent stabilization ordinance being in place, the vacancy rates cited above and vacancy rates which Cotati mobilehome parks have historically enjoyed would have given mobilehome park owners a virtual oligopoly where market forces do not influence space rental pricing.

12. Under the county of Sonoma’s voluntary mediation program for the resolution of mobilehome rent disputes, between 1985 and 1987, park owners proposed annual rent increases averaging 9.6 percent, nearly four times the rate of general price increases according to the CPI for Sonoma County. After mandatory arbitration was established, and a rent control chapter was adopted in the county, requested rent increases were generally twice or more of the approved rent increases. Approved rent increases, on the average, began to mirror the CPI.

13. As to mobilehome space rents in particular, the 1979 rent stabilization ordinance has succeeded in its broad objectives and rent stabilization laws should be enacted to continue such beneficial results in the event that the 1979 rent stabilization ordinance is repealed in November 1998.

14. Since the adoption of the 1979 rent stabilization ordinance, the city has construed its provisions as requiring vacancy control: that is, upon the tenant’s vacating of a rental unit or rental space, his/her successor tenant is entitled to the same rent previously charged to the vacating tenant. The city council finds that it would be desirable to continue to provide prospective mobilehome park tenants with an option to chose between a long-term lease and a periodic tenancy of less than one year in duration. The terms offered under typical long-term leases by some park owners are excessively long, oppressive, one-sided adhesion agreements. Such an option furthers a legitimate governmental objective and is not in conflict with or preempted by state law. Furthermore, the sale of mobilehomes on site subjects mobilehome coach owners to unreasonably suppressed resale rates due to oppressively high rental adjustments upon rent de-control. The city council finds that it would be desirable to continue to provide vacancy control in its rent stabilization program as hereunder provided.

15. The city council further finds that there has been and continues to be a shortage of spaces for the relocation of mobilehomes in the city, a condition which results in very low vacancy rates and tends to prevent normal competition between the owners and tenants of mobilehome parks. The need for effective and fair mobilehome park space rent stabilization continues to exist in Cotati in 1998 as it did in 1979.

D. The purpose of this chapter is to stabilize the rate of mobilehome park space rental rates in order to:

1. Prevent exploitation of the shortage of vacant mobilehome park spaces;

2. Prevent excessive and unreasonable mobilehome park space rent increases;

3. Rectify the disparity of bargaining power which exists between mobilehome park residents and mobilehome park owners;

4. Provide mobilehome park owners with a guaranteed rate of annual space rent increase which accurately reflects the rate of inflation and increases in their expenses; and

5. Provide a process for ensuring mobilehome park owners a fair, just and reasonable rate of return on their parks in cases where the guaranteed annual space rent increase provided by this chapter proves insufficient.

6. Provide continued rent control through the transfer of a mobilehome-on-site (i.e. on the mobilehome pad) to a new mobilehome owner to prevent exploitative rental increases which take place when vacancy decontrol is either in effect or practiced by park owners.

7. Provide options in the duration of tenancies to prospective mobilehome tenants to prevent oppressive adhesion contracts from being imposed upon new park tenants. (Ord. 680 § 1(part), 1998).

19.14.002 Definitions.

As used in this chapter:

“Affected tenants” means those tenants whose space is not covered by a valid lease meeting the requirements as outlined in Sec. 798.17(b) of the California Civil Code or otherwise legally exempt from local rent control regulation. Affected tenants are to be notified that a space rent increase is to become effective. For purposes of providing notice of the increase, providing copies of the rent stabilization chapter, and support of a rent arbitration petition, each space subject to a rental increase shall be deemed to have only one “affected tenant” for administrative convenience to the park owners. The reference to “all affected tenants” will refer to one representative tenant from each space subject to the proposed rental increase.

“Arbitrator” means a person who is neither a tenant as that term is defined in this chapter nor who has an interest in a mobilehome park of a nature that would require disqualification under the provisions of the Political Reform Act of 1974 if the person were an elected state official and a person whom the clerk of the Cotati city mobilehome space rent stabilization program (see “Clerk” below) determines meets one the following criteria:

a. 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 judgment of the clerk, provides that person with the knowledge and skills to conduct a space rent dispute arbitration in a professional and successful manner; or

b. Completion of at least three arbitration proceedings for a superior court or other public entity that involved issues the clerk finds similar to those raised in space rent dispute arbitrations; or

c. Served as a California superior or municipal court pro tempore judge.

“Base rent” means the authorized rent, calculated pursuant to the provisions of Section 19.14.003, plus any rent increase allowed under this chapter or any rent adjustment attributable to vacancy decontrol as provided in Section 19.14.150.

“Base year” means the calendar year 1998.

“Clerk” means the clerk of the Cotati city mobilehome space rent stabilization program, who shall be the city manager or his or her designee.

“Capital improvements” means those improvements that materially add to the value of the property and appreciably prolong its useful life or adapt it to new uses, and which may be amortized over the useful remaining life of the improvement to the property. The term “capital improvements” does not include those costs associated with the normal maintenance and upkeep of facilities and premises which were reasonably intended to be part of consideration provided by the mobilehome park as rent. Substantial rehabilitation of the park that is necessitated as a result of the parkowner’s neglect, permissive waste, deferred maintenance or acts of God shall not be regarded to be capital improvements to the extent that they restore facilities and premises to the conditions reasonably bargained for by the mobilehome park tenants. Proposed capital improvements claims must set forth an amortization table spreading the cost of the improvement over its proven useful life. Rents based on such costs, if approved, must be separately itemized on the monthly rent invoice. In addition, the beginning date upon which such rents may be imposed and the ending date upon which such rents may no longer be imposed, must be stated on each monthly rent invoice submitted during the time such rents are charged to the tenant. Monthly rent shall be decreased for such amortized capital improvement expenses at the end of the amortization period. Failure to do so shall be regarded to be an unauthorized increase in rent. Capital improvements must be for the primary benefit, use and enjoyment of the tenants of the entire park, and costs must be allocated over all beneficiaries of the improvement.

“Consumer Price Index” means the Consumer Price Index for all Urban Consumers San Francisco-Oakland Area, published by the U.S. Department of Labor, Bureau of Labor Statistics.

“Housing service” means a service provided by the owner related to the use or occupancy of a mobilehome space, which is neither a capital improvement nor substantial rehabilitation as those terms are defined herein, including but not limited to, repairs, replacement, maintenance, painting, lighting, heat, water, laundry facilities, refuse removal, recreational facilities, parking, security service, and employee services.

“Mobilehome” means a structure designed for human habitation and for being moved on a street or highway under permit pursuant to Section 35790 of the California Vehicle Code. “Mobilehome” includes a manufactured home, as defined in Section 18007 of the California Health and Safety Code, and a mobilehome, as defined in Section 18008 of the California Health and Safety Code, but does not include a recreational vehicle, as defined in Section 799.29 of the California Civil Code and Section 18010 of the California Health and Safety Code, or a commercial coach, as defined in Section 18001.8 of the California Health and Safety Code except when such a vehicle has continuously remained within a mobilehome park for a period in excess of nine months.

“Mobilehome park” means any area of land within the incorporated areas of the city where two or more mobile-home spaces are rented, or held out for rent, to accommodate mobilehomes used for human habitation.

“Mobilehome park owner” means any owner, lessor, or sublessor of a mobilehome park in the incorporated areas of the city who receives or is entitled to receive rent for the use or occupancy of any mobilehome space thereof, and the representative, agent, or successor of such owner, lessor, or sublessor, and who reports to the Internal Revenue Service any income received or loss of income resulting from such ownership or claims any expenses, credits, or deductions because of such ownership.

“Mobilehome space” means any site within a mobilehome park located in the incorporated areas of the city intended, designed, or used for the location or accommodation of a mobilehome and any accessory structures or appurtenances attached thereto or used in conjunction therewith except “new construction” as defined by Civil Code Section 798.45. The term “mobilehome space” shall also include, for purposes of this rent stabilization ordinance, rentable spaces within mobilehome parks which have been occupied by a “recreational vehicle” as defined by Civil Code Section 799.29 for a period of nine months or more.

“Mobilehome space tenant” means a tenant, subtenant, lessee, or sublessee, or any other person entitled to the use or occupancy of any mobilehome space not otherwise a party to a rental agreement exempt from regulation under this chapter pursuant to Civil Code Section 798.17.

“Net operating income” means as defined in Section 19.14.020 of this chapter.

“Owner” means a mobilehome park owner.

“Party” as used in this chapter refers to any affected mobilehome tenant and/or owner involved in proceedings under this chapter.

“Percent change in Consumer Price Index” means the annual percent change in the Consumer Price Index (“CPI”), calculated to the nearest tenth, published for the month of June, issued in the month of July. In the event that an index is not published for the month of June, the closest preceding month for which an index is published shall be used. It is the intent of this chapter to fix the CPI in the beginning of the fiscal year, for the rest of that fiscal year barring an unforeseen failure to publish a CPI for the month of June.

“Rent” means mobilehome space rent.

“Rent increase” means any additional space rent demanded of or paid by a tenant for a mobilehome space including any reduction in housing services without a corresponding reduction in the amount demanded or paid for rent. Said increase shall be uniform in percentage rate relative to current base rent or uniform in dollar amount relative to base rent. Failure to reduce rent at the end of an amortization period for a capital improvement or for separately billed utilities will also be regarded to constitute an unauthorized rent increase for the purposes of this chapter.

“Rent stabilization administration fee” means the fee established from time to time by resolution of the city council in accordance with the provisions of Section 19.14.070 herein.

“Space rent” means the total consideration, including any bonus, benefit, or gratuity, demanded or received by a mobilehome park owner for or in connection with the use or occupancy of a mobilehome space or any housing services provided with the mobilehome space. Space rent shall not include any amount paid for the use or occupancy of a mobilehome dwelling unit, unless the amount paid for the use or occupancy of a mobilehome is or includes consideration paid to a mobilehome park owner under a rental agreement or other document evidencing tenancy of the mobilehome.

“Substantial rehabilitation” means that work done by an owner to a mobilehome space or to the common areas of the mobilehome park, exclusive of a capital improvement as that term is defined herein, the value of which exceeds two hundred dollars ($200.00) and which is performed whether 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.

“Tenant” means a mobilehome space tenant.

“Tenant-to-be” means a person who is not currently a tenant in a mobilehome park but is a prospective mobilehome space tenant who desires the use of a mobilehome space as defined in this chapter and has presented himself/herself to the parkowner as such. (Ord. 680 § 1(part), 1998).

19.14.003 Base rent – Initial calculation.

Except as hereinafter provided, an owner shall not demand, accept, or retain rent for a mobilehome space exceeding the lawful rent in effect for said space on the day before the effective date of the ordinance codified in this chapter. If a previously rented mobilehome space was not rented on the day before the effective date of said ordinance, the owner shall not, except as hereinafter provided, demand, accept or retain rent for said space exceeding the rent in effect during the last month the space was rented prior to the effective date of said ordinance. (Ord. 680 § 1(part), 1998).

19.14.004 Residential rent increase limitations.

A. Except as provided in subsections B and C of this section, from and after the effective date of the ordinance codified in this chapter, the space rent payable for use or occupancy of any mobilehome space shall not be increased within twelve months of the effective date of any preceding rent increase.

Such increase shall not exceed:

1. One hundred percent of the percent change in the Consumer Price Index; or

2. Six percent, whichever may be less.

B. If a park owner wishes to apportion to each space on a pro rata basis the allowable percentage of any current rent stabilization administration fee, in addition to any increase of space rent in accordance with preceding subsection A of this section, the following provision shall apply:

1. The owner shall provide to all affected tenants documentation supporting the allowable amount to be collected in order to recover a portion of rent stabilization administration fees. At a minimum such documentation shall include: billing notices or other equivalent documents from the city imposing the rent stabilization administration fee; a copy of Section 19.14.070 which authorizes the apportionment of rent stabilization administration fees; and the calculations used by the owner to apportion the cost of the allowable percentage among the affected tenants. In addition, the owner shall provide all affected tenants with the address and telephone number of the clerk and the fact that the affected tenant may contact the clerk for an explanation of the provisions of this chapter.

2. A rent increase approved pursuant to the provisions of this subsection and in accordance with the procedure set forth in Section 19.14.006 shall not be considered part of the rent base upon which future rent increases can be made.

C. In the event an owner wishes to increase the rent payable for any mobilehome space within the twelve-month period more than the amount permitted in subsection A of this section for any reason other than that stated in subsection B of this section, the procedures set forth in Sections 19.14.005 and 19.14.006 shall be followed. In the event an owner wishes to increase the rent payable for any mobilehome space within the twelve-month period more than three hundred percent of the percent change in the Consumer Price Index, a mandatory meet-and-confer meeting and arbitration shall automatically be required to show good cause why such an increase is necessary. The arbitrator may reduce this proposed increase to a figure determined upon the evidence submitted by the park owner or his/her representative to be a fair return upon investment. Any rent increase permitted under this subsection must be implemented and noticed by the park owner such that it becomes effective within twelve months of the date of the arbitrator’s final decision. Failure to timely notice any such rent increase shall result in the park owner’s forfeiture of his/her/its right to do so.

D. A notice of rent increase given by an owner pursuant to Section 19.14.004(A), (B) or (C) shall be given in writing at least ninety days before any rent increase is to take effect.

E. A notice of rent increase incorporating within it a proposed or completed capital improvement which is not otherwise authorized as a pass-through pursuant to Civil Code Section 798.49 must be claimed within twelve months of the completion of the project or construction or the owner’s receipt of the final billing therefor, whichever occurs later. (Ord. 680 § 1(part), 1998).

19.14.005 Information to be supplied to tenants and tenants-to-be.

A. Within thirty days after the effective date of the ordinance which adopted this section and prior to the re-renting of each mobilehome space thereafter, the owner shall supply each affected tenant or tenant-to-be, respectively, with a current copy of this chapter. Within thirty days after having provided a copy of this chapter to each existing, affected tenant, the owner shall provide a written statement, under penalty of perjury, to the clerk attesting to the owner’s compliance herewith and identifying each tenant to whom said copy was delivered. As to mobilehome spaces which are rented after the effective date of said ordinance and under a new rental agreement or an extension of a rental agreement in effect at the time said ordinance becomes effective, within thirty days after that new rental agreement or extension becomes effective, the owner shall provide a written statement, under penalty of perjury, to the clerk attesting to the owner’s provision of a copy of this chapter to the person(s) renting said spaces and to all tenants-to-be with respect to said spaces in compliance with this subsection. Said attestation shall also identify all such persons to whom a copy of this chapter was delivered.

B. Whenever the owner serves a notice of rent increase, except a notice of rent increase provided pursuant to Section 19.14.004(A), the owner shall at the same time and in the same manner serve the affected tenant or tenant-to-be with a notice that sets forth all of the following information:

1. The amount of the rent increase both in dollars and as a percentage of existing rent and documentation supporting the level of increase desired, including at a minimum: a summary of the unavoidable increases in maintenance and operating expenses; a statement of the cost, nature, amortization, and allocation among mobilehome spaces of any substantial rehabilitation or capital improvement; a summary of the increased cost of the owner’s debt service and the date and nature of the sale or refinancing transaction; a summary of the owner’s net operating income of the preceding twenty-four months and other relevant information that supports the level of rent increase desired.

2. The identity of all other affected tenants and the spaces which they rent.

3. The address and telephone number of the clerk and: (a) the fact that the tenant is encouraged to contact the clerk for an explanation of the provisions of this chapter; and (b) documentation supporting the level of increase is on file with the clerk.

4. A copy of the official petition form as prepared and provided by the clerk which initiates the process established by this chapter.

5. In addition, the park owner shall place on file with the clerk two copies of documentation supporting the level of increase desired, including at a minimum: a summary of the unavoidable increases in maintenance and operating expenses; a statement of the cost, nature, amortization, and allocation among mobilehome spaces of any substantial rehabilitation or capital improvement; a summary of the increased cost of the owner’s debt service, if any, and the date and nature of the sale or refinancing transaction, if any; a summary of the owner’s net operating income of the preceding twenty-four months and other relevant information that supports the level of rent increase desired. These documents will be available for inspection at the offices of the Sonoma County community development commission and city manager.

6. If applicable, notification that the proposed rent increase exceeds three hundred percent of the change in the Consumer Price Index, and that arbitration is deemed automatically required by the provisions of Section 19.14.004(C) without any need to file an arbitration petition. Such notices shall bear the following language: “ARBITRATION OF THE PROPOSED INCREASE IS AUTOMATICALLY REQUIRED IN THIS MATTER BY OPERATION OF LAW.” Erroneous use of this notice shall be regarded as an irrevocable stipulation to the jurisdiction of the arbitrator.

C. Prior to offering to rent a mobilehome space to a tenant-to-be, the park owner shall also serve the tenant-to-be as defined in Section 19.14.002 with a separate “RENTAL OPTION” notice which sets forth the recitations in capital letters set forth in Section 19.14.007, Rights of a “tenant-to-be.”

D. All written information and notices which are required hereunder to be provided by the owner to the tenants and/or tenants-to-be shall be written in plain, easy-to-understand language, avoiding, whenever possible, the use of terms of art, technical terms or words which are peculiar to a given profession or teaching and not commonly used or understood.

E. An owner failing to provide an affected tenant or tenant-to-be and the clerk with the information, documents, and notices required by this section shall not be entitled to collect any rent increase otherwise authorized by this chapter from that tenant nor to any rent increase that might otherwise be awarded by an arbitrator. Such failure by the owner shall be a defense in any action brought by the owner to recover possession of a mobilehome space or to collect any rent increase from the tenant. (Ord. 680 § 1(part), 1998).

19.14.006 The rent dispute resolution process.

A. Mandatory Meet-and-Confer Meeting. Except when a parkowner elects rent increases permitted under Section 19.14.004(A), the tenants and parkowners must, within seven working days of the notice of rent increase, meet and confer with each other’s representatives at city hall. Written notice of the time, place and date of the meeting should be arranged within forty-eight working hours of the notice of rent increase. If the park owners or tenants fail to agree on the time, place and date of the hearing within that forty-eight hour span and provide due notice to the clerk, the meeting shall be set at the convenience of the clerk. At the meeting, representatives of the parties should exchange documentary evidence that the parties in good faith then know will be used to support their respective positions in an arbitration and discuss the issues in dispute. In the case of a park owner, all financial data upon which any proposed increase is claimed shall be supplied to tenant representatives at the time of the meet-and-confer meeting.

1. Sanctions. A park owner’s failure to provide the minimum information required by subsection (A)(2) of this section or attend the hearing shall require the clerk to suspend further proceedings under this chapter. The park owner’s application for a rent increase under such circumstances shall be deemed defective, without force or effect, and deemed withdrawn. Renoticing of the increase shall be required to reinitiate an application for rent increase.

2. Minimum Meet-and-Confer Information. The parkowner has a duty to provide adequate information to the tenants regarding the park’s net operating income sufficient for a reasonably sophisticated inquiry into the financial status of the parkowner’s business. This will consist of true and accurate book entries or other competent evidence of gross income including, but not limited to, gross rents, interest upon security and cleaning deposits, income from ancillary services (submetering of utilities, laundry facilities, etc.) and true and accurate book entries or other competent evidence of operating expenses including, but not limited to, license fees, property taxes, utilities, insurance, management expenses, landlord performed labor, building and grounds maintenance, legal fees, auto and truck expenses, employee benefits, permits, refuse removal, ground lease payments, and similar additional expenses.

B. Petition. If discussions between owner and tenants do not resolve the dispute between them, the tenants or their representative shall file with the clerk a petition for space rent review and a copy of the notice of rent increase, if available, within twenty-one days after the date upon which the rent increase notice is received. The clerk shall not accept a petition for filing unless it has been signed by at least fifty-one percent of all affected tenants. Upon the filing of a petition, the rent increase is not effective and may not be collected until and to the extent it is awarded by an arbitrator or until the petition is abandoned. As used herein, the term “abandoned” refers to lack of prosecution of the arbitration by the mobilehome tenants’ representative(s). An automatic arbitration based upon a more than three hundred percent CPI increase will not require active tenant prosecution, although such prosecution will not be prohibited. The term “prosecution” refers to actively pursuing necessary steps toward preparing the tenants’ case for the arbitration hearing.

C. Contents of Petition.

1. The petition for space rent review shall set forth the total number of affected rented spaces in the mobilehome park, shall identify the space occupied by each tenant and shall state the date upon which the notice of the rent increase was received by the tenant(s).

2. After obtaining the required signatures, the tenant(s) shall deliver the petition or mail it by registered or certified mail to the clerk at the following address: Community Development Commission, 1440 Guerneville Road, Santa Rosa, California 95403 (or other address as determined by the clerk). No petition shall be accepted unless it is accompanied by the requisite number of signatures and is received in the office of the clerk within the twenty-one-day period set forth in subsection B of this section. The clerk shall provide a copy of the completed petition form to both parties and the arbitrator forthwith or within five working days of the petition’s receipt.

D. Information Questionnaire. After the clerk has accepted a petition for space rent review, the clerk shall remit to the owner and tenants an information questionnaire in such form as the clerk may prescribe. The completed information questionnaire must be returned to the clerk at least five working days prior to the date scheduled for hearing of the petition by the arbitrator. Copies of the completed information questionnaire shall be provided to the arbitrator and the opposing party.

E. Assignment of Arbitrator and Hearing Date. Upon receipt of the petition, or in the event of an automatic arbitration, or upon an affected tenant’s claim of a vacancy control violation where an unauthorized rent increase has been sought, the clerk shall, within five working days, assign an arbitrator. The clerk shall set a date for the arbitration hearing no sooner than five nor later than ten working days after the arbitrator is assigned. The owner and affected tenant(s) shall be notified immediately in writing by the clerk of the date, time, and place of the hearing and this notice shall be served either in person or by ordinary mail.

F. Arbitration Hearing.

1. The owner and tenant(s) may appear at the hearing and offer oral and documentary evidence. Both the owner and tenant(s) may designate a representative or representatives to appear for them at the hearing. The arbitrator may grant or order one continuance not to exceed five days to each party from the date of the hearing. The burden of proving that the amount of rent increase is reasonable shall be on the owner by a preponderance of the evidence. The hearing need not be conducted according to technical rules relating to evidence and witnesses. The rules of evidence and manner of producing evidence shall be those rules set forth in Section 11513 of the California Government Code for the conduct of hearings under the Administrative Procedure Act. These rules may be relaxed at the discretion of the arbitrator in the interests of justice.

2. The arbitrator shall, within fourteen days of the hearing, submit by mail a written statement of decision and the reasons for the decision to the clerk who shall forthwith distribute by mail copies of the decision to the owner and tenant(s). The arbitrator shall determine the amount of rent increase, if any, which is reasonable based upon all the provisions of this chapter.

3. Excluding rent increases permitted under Section 19.14.004(A) and (B), the arbitrator shall not allow more than one rent increase per park per twelve-month period.

4. The decision of the arbitrator, rendered in accordance with this section, shall be final and binding upon the owner and all affected tenants. The decision of the arbitrator will be subject to the provision of Code of Civil Procedure Section 1094.5.

5. Any party may have electronic recording equipment or a court reporter present to record and prepare a transcript of the hearing before the arbitrator, however, such equipment or reporter shall be provided at that party’s own expense.

6. The arbitrator is authorized to modify the basic time periods set forth herein at his or her discretion to promote the purposes of this program provided a final decision is rendered within ninety days of the notice of rent increase.

7. Any procedural or jurisdictional dispute regarding the processes set forth herein may be decided by the arbitrator.

G. Tenant’s and Owner’s Right to Contact Clerk. The tenant and owner may contact the clerk for an explanation of the provisions of this chapter. (Ord. 680 § 1(part), 1998).

19.14.007 Rights of a “tenant-to-be.”

Any person who is a “tenant-to-be” as defined in Section 19.14.002 must be offered the option of renting a mobilehome space in a manner which will permit the “tenant-to-be” to receive the benefits of the mobilehome space rent stabilization program described in this chapter, which includes, but is not limited to, rental of a mobilehome space on a month-to-month basis, and a new base rent as set forth in Section 19.14.150(B). Such a person cannot be denied the option of a tenancy twelve months or less in duration. The park owner shall provide each “tenant-to-be” with a written notification of the option which shall make the following recitation:

“UNDER COTATI MUNICIPAL CODE SECTION 19.14.007 YOU ARE LEGALLY ENTITLED TO ELECT A MONTH-TO-MONTH TENANCY OVER ANY OTHER LONGER PERIODIC TENANCY. YOU ARE ADVISED THAT YOU MAY NOT BE ENTITLED TO RENT STABILIZATION (RENT CONTROL) PROGRAM BENEFITS IF YOU ELECT A LEASE OF MORE THAN TWELVE MONTHS IN DURATION IF THAT LEASE MEETS THE REQUIREMENTS OF CIVIL CODE SECTION 798.17 WHICH HAS BEEN ATTACHED HERETO.”

Any effort to circumvent the requirements of this section shall be unlawful, as well as an unfair business practice subject to enforcement under Business and Professions Code Section 17200 et seq. The rights set forth above have no application to mobilehome spaces subject to a more-than-twelve-month lease. By definition, tenants-to-be are prospective “mobilehome space tenants,” and such tenants are defined by Section 19.14.002 as excluding “a party to a rental agreement exempt from regulation under this chapter pursuant to Civil Code Section 798.17." Within thirty days after the mobilehome space rental agreement becomes effective, the owner shall provide a written statement, under penalty of perjury, to the clerk attesting to the owner’s compliance with this section as to the person(s) renting the space and to all tenants-to-be with respect to the space. The attestation shall also identify all persons to whom the notice described herein was provided. (Ord. 680 § 1(part), 1998).

19.14.008 Subpoena power.

Subpoenas, including subpoenas duces tecum, requiring a person to attend a particular time and place to testify as a witness, may be issued in connection with any dispute pending before an arbitrator, and shall be issued at the request of the clerk, an arbitrator, the tenant(s) or the owner. Subpoenas shall be issued and attested by the clerk of the city council. A subpoena duces tecum shall be issued only upon the filing with the clerk of the city council of an affidavit showing good cause for the production of the matters of things desired to be produced, setting forth in full detail the materiality thereof to the issues involved in the proceedings, and stating that the witness has the desired matters or things in his or her possession or under his or her control, and a copy of such affidavit shall be served with the subpoena. Any subpoena or subpoena duces tecum issued pursuant to the provisions of this chapter may be served in person or by certified mail, return receipt requested, and must be served at least five days before the hearing for which the attendance is sought. Service by certified mail shall be complete on the date of receipt. Any subpoena or subpoena duces tecum issued pursuant to the provisions of this chapter shall be deemed issued by and in the name of the city council. (Ord. 680 § 1(part), 1998).

19.14.009 Consolidation of petitions.

As soon as possible after a petition has been filed with respect to mobilehome spaces which are within a single park, the clerk shall, to the extent possible, consistent with the time limitations provided herein, consolidate petitions involving ten or fewer affected tenants. (Ord. 680 § 1(part), 1998).

19.14.010 Standards of review.

In evaluating the space increase proposed or imposed by the owner, the following factors may be considered:

A. Beneficial increases in maintenance and operating expenses, including but not limited to the reasonable value of the owner’s labor and any increased costs for services provided by a public agency, public utility, or quasi-public agency or utility, provided, however, that any increased costs in rent stabilization administration fees shall be subject to the provisions of Section 19.14.004(B) and 19.14.070 herein.

B. The substantial rehabilitation or the addition of capital improvements, including the reasonable value of the owner’s labor, as long as such rehabilitation or improvement has been completed and is:

1. Distinguished from ordinary repair or maintenance;

2. For the primary benefit, use, and enjoyment of the tenants;

3. Permanently fixed in place or relatively immobile and dedicated to the use of the property;

4. Not coin-operated nor one for which a “use fee” or other charge is imposed on tenants for its use;

5. Cost-factored and amortized over the good faith estimate of the remaining useful life of the rehabilitation or improvement; and

6. Does not constitute maintenance of the infrastructure of gas or electrical lines within the mobilehome park for which the public utility has permitted the parkowner a special premium with the intent that it be used to replace or otherwise maintain the system within the mobilehome park.

C. Increased costs of debt service due to a sale or involuntary refinancing of the park within twelve months of the increase provided that:

1. The sale or refinancing is found to have been an arm’s length transaction;

2. the proceeds of such refinancing is found to have been used for park improvements or similar park-related uses; and

3. The aggregate amount from which total debt service costs arise constitutes no more than seventy percent of the value of the property as established by a lender’s appraisal.

D. The rental history of the space or the park of which it is a part, including:

1. The presence or absence of past increases;

2. The frequency of past rent increases; and

3. The occupancy rate of the park in comparison to comparable parks in the same general area.

E. The physical condition of the mobilehome space or park of which it is a part, including the quantity and quality of maintenance and repairs performed during the preceding twelve months.

F. Any increase or reduction of housing services since the last rent increase.

G. Existing space rents for comparable spaces in comparable parks located in the city.

H. A decrease in “net operating income” as defined in Section 19.14.020(A).

I. A fair return on the property prorated among the spaces of the park.

J. Other financial information which the owner is willing to provide.

K. Any costs incurred as a result of a natural disaster and only to the extent such costs have not been reimbursed to the owner by insurance or other sources. (Ord. 680 § 1(part), 1998).

19.14.020 Net operating income.

In evaluating a space rent increase imposed by an owner to maintain the owner’s net operating income from the park, the following definitions and provisions shall apply:

A. “Net operating income” of a mobilehome park means the gross income of the park less the operating expenses of the park.

B. “Gross income” means the sum of the following:

1. Gross space rents, computed as gross space rental income at one hundred percent occupancy; plus

2. Other income generated as a result of the operation of the park, including, but not limited to, fees for services actually rendered; plus

3. Revenue received by the park owner from the sale of gas and electricity to park residents where such utilities are billed individually to the park residents by the park owner. This revenue shall equal the total cost of the utilities to the residents minus the amount paid by the park owner for such utilities to the utility provider; minus

4. Uncollected space rents due to vacancy and bad debts to the extent that the same are beyond the park owner’s control. Uncollected space rents in excess of three percent of gross space rent shall be presumed to be unreasonable unless established otherwise and shall not be included in computing gross income. Where uncollected space rents must be estimated, the average of the preceding three years experience shall be used.

C. “Operating expenses” means:

1. Real property taxes and assessments.

2. Utility costs to the extent that they are included in space rent.

3. Management expenses including the compensation of administrative personnel, including the value of any mobilehome space offered as part of compensation for such services, reasonable and necessary advertising to ensure occupancy only, legal and accounting services as permitted herein, and other managerial expenses. Management expenses are presumed to be not more than five percent of gross income, unless established otherwise.

4. Normal repair and maintenance expenses for the grounds and common facilities including but not limited to landscaping, cleaning, and repair of equipment and facilities.

5. Owner-performed labor in operating or maintaining the park. In addition to the management expenses listed above, where the owner performs managerial or maintenance services which are uncompensated, the owner may include the reasonable value of such services. Owner-performed labor shall be limited to five percent of gross income unless the arbitrator finds that such a limitation would be substantially unfair in a given case. A park owner must devote substantially all of his or her time, that is, at least forty hours per week, to performing such managerial or maintenance services in order to warrant the full five percent credit of his or her labor as an operating expense. No credit for such services shall be authorized unless a park owner documents the hours utilized in performing such services and the nature of the services provided.

6. Operating supplies such as janitorial supplies, gardening supplies, stationery, and so forth.

7. Insurance premiums prorated over the life of the policy.

8. Other taxes, fees, and permits, except as provided in Section 19.14.070 herein.

9. Reserves for replacement of long-term improvements or facilities, provided that accumulated reserves shall not exceed five percent of gross income.

10. Capital improvement costs exceeding existing reserves for replacement.

Expenditures for capital improvements to upgrade existing facilities shall be an allowable operating expense only if the park owner has:

a. Established upon written verification, or by other competent evidence to the satisfaction of the arbitrator, that the cost of the capital improvements provided to the park tenants, for their general use, are factually correct as claimed.

b. Said capital improvements are wholly compensable to the park owner upon appropriate amortization of their cost, together with a reasonable return upon the capital improvement investment made by the park owner.

c. Any capital improvement expenses shall be amortized over the reasonable life of the improvement or such other period as may be deemed reasonable by the arbitrator under the circumstances. In the event that the capital improvement expenditure is necessitated as a result of an accident, disaster, or other event for which the park owner received insurance benefits, only those capital improvement costs otherwise allowable exceeding the insurance benefits may be calculated as operating expenses.

11. Involuntary refinancing of mortgage or debt principal. A park owner may, under the provisions of this subsection, be able to include certain debt service costs as an operating expense. Such costs are limited to increases in interest payments from those interest payments made during 1998 or the first year such payments were made if the owner acquired the park after 1998 which result from one or the following situations or the equivalent thereof:

a. Refinancing of the outstanding principal owed for the acquisition of a park where such refinancing is mandated by the terms of a financing transaction entered into prior to January 1, 1999, for instance, termination of a loan with a balloon payment; or

b. Increased interest costs incurred as a result of a variable interest rate loan used to finance the acquisition of the park and entered into prior to January 1, 1999.

In refinancing, increased interest shall be permitted to be considered as an operating expense only where the park owner can show that the terms of the refinancing were reasonable and consistent with prudent business practices under the circumstances.

D. Operating expenses shall not include the following:

1. Debt service expenses, except as provided in subsection (C) (11) of this section.

2. Depreciation.

3. Any expense for which the park owner is reimbursed.

4. Attorneys’ fees and costs, except printing costs and documentation as required by Section 19.14.005 only, incurred in proceedings before an arbitrator or in connection with legal proceedings challenging the decision of an arbitrator or the validity or applicability of this chapter.

E. All operating expenses must be reasonable. Whenever a particular expense exceeds the normal industry or other comparable standard, the park owner shall bear the burden of proving the reasonableness of the expense. To the extent that an arbitrator finds any such expense to be unreasonable, the arbitrator shall adjust the expense to reflect the normal industry or other comparable standard.

F. In determining whether an owner’s net operating income has been maintained, the owner’s net operating income in the base year shall be the net operating income which is to be maintained and against which future years’ net operating income shall be compared.

G. To the extent that any rent increase granted by an arbitrator or notice by an owner is based upon maintaining the owners’ net operating income, the increase may be charged to the tenants only for the twelve months immediately following the effective date of the notice of the rent increase. (Ord. 680 § 1(part), 1998).

19.14.030 Obligations of the parties.

A. If a final decision by an arbitrator finds that a proposed increase or any portion thereof that was previously inoperative is justified, the tenant shall pay the amount found justified to the owner within thirty days after the decision is made or as otherwise ordered by the arbitrator.

B. If a final decision by an arbitrator finds that an increase or any portion thereof is not justified, the owner shall refund any amount found to be unjustified, but that had been paid, to the tenant within thirty days after the decision is made or as otherwise ordered by the arbitrator. If such refund is not made within the applicable time period, the tenant may withhold the amount from the next space rent(s) due until the full amount of the refund has been made. Notwithstanding the foregoing, in the event that the tenancy of tenant is terminated for any reason prior to full credit against rent, the balance of the credit due the tenant shall be paid by the owner within thirty days from the date of the termination of the tenancy.

C. Any sum of money that under the provisions of this section is the obligation of the owner or tenant, as the case may be, shall constitute a debt and, subject to the foregoing provisions of this section, may be collected in any manner provided by law for the collection of debts. (Ord. 680 § 1(part), 1998).

19.14.040 Tenant’s right of refusal.

A tenant may refuse to pay any increase in rent which is in violation of this chapter, provided a petition has been filed and either no final decision has been reached by an arbitrator or the increase has been determined to violate the provisions of this chapter. Such refusal to pay shall be a defense in any action brought to recover possession of a mobilehome space or to collect the rent increase. (Ord. 680 § 1(part), 1998).

19.14.050 Retaliatory acts – Tenants’ right to organize.

No owner may retaliate against a tenant or tenant-to-be for the tenant’s or tenant-to-be’s assertion or exercise of rights under this chapter in any manner, including but not limited to, threatening to bring or bringing an action to recover possession of a mobilehome space; engaging in any form of harassment that causes a tenant to quit the premises; dissuades a tenant-to-be from freely exercising his or her legal options to chose a month-to-month rental; decreasing housing services; increasing the space rent; or imposing or increasing a security deposit or any other charge payable by a tenant. The tenants have a right to organize a tenant’s association without hindrance from the park owner to exercise the rights provided under the provisions of the city of Cotati Municipal Code. This association may be referred to as “the Park Tenant’s Association at (Park Name).” (Ord. 680 § 1(part), 1998).

19.14.060 Solicitation of any petitions by the park owners are without force or legal effect within city’s program.

The distribution of a petition or other documents seeking to have mobilehome tenants waive rights, abandon a filed petition or in any way affect the entitlement of the tenants to participate in the rent stabilization process authorized under this chapter shall be without force or legal effect within the city’s rent stabilization program. Such documents shall not affect the right of any tenant to participate in the rights, remedies, procedures and processes set forth in this chapter. Efforts to utilize such documents to discourage participation in the city’s rent stabilization program may be deemed retaliatory. (Ord. 680 § 1(part), 1998).

19.14.070 Fees.

The costs of administration of this chapter shall be borne by the city, subject to reimbursement by imposition of a rent stabilization administration fee chargeable against each mobilehome space in the city and payable by each park owner. The park owner who pays these fees may pass through fifty percent of the fees assessed against a mobilehome space to the tenant only as set forth herein. This fee pass through must take place no later than twelve months after the park owner is billed for the program administration fees. At the owner’s option, said fee pass through shall be invoiced in (a) twelve equal, monthly installments or (b) four equal, quarterly installments. Failure to timely pass through fifty percent of the fees assessed against a mobilehome space will result in the loss of the park owner’s right to do so. The remaining fifty percent of the fees assessed against a mobilehome space shall not be passed on in any way to tenants. Fees passed through to tenants as herein authorized shall not be considered a part of the rent base upon which future rent increases can be made.

The fees imposed by this section shall be paid annually. The time and manner of payment, delinquency status, and assessment and collection of penalties for delinquent payment of the fees imposed by this section shall be as provided by separate ordinance of the city council. The clerk shall recommend to the city of Cotati from time to time the amount of such fee and the city council shall adopt such fee by ordinance or resolution. (Ord. 680 § 1(part), 1998).

19.14.075 Assessing and collecting fees.

A. The annual fee (“fee”) for the administration of the mobilehome rent space stabilization program established under this chapter shall be based on the costs the city incurs in administrating the program during each calendar year in which the program is in existence and effect.

B. On or before March 1 of each year, pursuant to resolution adopted by the city council and the Cotati Community Redevelopment Agency (“agency”), the city shall determine the amount of the fee payable by each mobilehome park owner and shall deliver to each owner an invoice for the amount owed to the city for the calendar year in which the invoice is delivered. The invoice shall be delivered to each owner at least thirty days prior to April 30. The amount stated in the invoice shall be paid by the owner no later than April 30 of each year

C. The city’s finance department shall issue to each mobilehome park owner a receipt for the park owner’s payment of the fee.

D. Tenants of mobilehome parks subject to the fee shall be eligible for subsidy from the housing fund of the agency to assist the tenants in paying any fee established by the council pursuant to applicable resolution, upon providing proof of the tenant’s earning very low or low income within the definitions established by HUD.

E. The city may bring an action for the recovery of any fee not timely paid by any person owing the fee pursuant to the ordinance codified in this chapter, the resolution setting the fee, and/or this chapter. Interest shall accrue on all unpaid fee amounts owed at the rate of ten percent per annum from the date the fee is due until the fee is fully paid. (Ord. 723 § 1, 2001)

19.14.080 Exemption from fees.

Any park owner who believes that he/she may be entitled to a space fee exemption pursuant to Civil Code Section 798.17(b), having provided the park tenant with a legally recognized long-term lease which is not subject to rent stabilization administration fees, shall provide the clerk with the following documentation:

A. The executed lease for each exempt space claimed;

B. Amendments to said exempt lease, if any;

C. For a newly constructed space, proof that the space was constructed after November 3, 1998 (building permits, etc.); and

D. Evidence that the owner complied with Sections 19.14.005 and 19.14.007. (Ord. 680 § 1(part), 1998).

19.14.090 Nonwaiverability.

Any provision, whether oral or written, in or pertaining to a rental agreement whereby any provision of this chapter is waived or modified, is against public policy and void, except with respect to any rental agreement complying with all of the terms and conditions set forth in Section 798.17 of the California Civil Code. (Ord. 680 § 1(part), 1998).

19.14.110 Penalties and remedies.

In addition to those penalties and remedies set forth elsewhere in this chapter, the following remedies shall apply:

Any owner who demands accepts, receives, or retains any money as rent from a tenant to which the owner is not entitled under the provisions of this chapter shall be liable to the tenant for any actual damages, attorney’s fees, and costs incurred by the tenant as a consequence thereof plus a penalty in the sum of three times the amount of money the owner accepted, received, or retained in violation of the provisions of this chapter or five hundred dollars, whichever is greater. (Ord. 680 § 1(part), 1998).

19.14.120 Rights of affected tenants reserved.

This chapter shall not be construed to limit or curtail any other action or proceeding which may be pursued by an affected tenant against an owner before any court or other body having jurisdiction thereof. (Ord. 680 § 1(part), 1998).

19.14.121 Tenant complaints.

Any tenant or tenant-to-be may file a complaint with the clerk for the purpose of contesting any rent increase and/or to enforce any provision of this chapter. Prior to and as a condition to such filing, the tenant and/or tenant-to-be must meet and confer with the owner to attempt to informally resolve their differences. The owner shall make him/herself available for the meeting and conferring within a reasonable time after being requested to do so by the tenant and/or tenant-to-be, but no later than thirty days thereafter. If applicable, the owner shall comply with Section 19.14.006(A)(2). If such informal resolution cannot be had, then the tenant and/or tenant-to-be (hereinafter collectively referred to as “complainant”) may file with the clerk (and contemporaneously deliver a copy to the owner) his/her complaint. All such complaints shall describe in detail the basis therefor and shall attach, where available and necessary to a full understanding of the complaint, documents and writings which support the complaint. Upon receiving such a complaint, the clerk shall assign an arbitrator to the matter in accordance with Section 19.14.006(E) and the matter shall be arbitrated in conformance with Section 19.14.006(F). As to a complaint which challenges a rent increase, the burden shall be on the owner to prove the validity of the increase by a preponderance of the evidence. As to a complaint which seeks to enforce any provision of this chapter not involving an increase in rent, the complainant shall have the burden of proof by a preponderance of the evidence, unless the complaint seeks to enforce an obligation which is expressly imposed upon the owner, in which case the burden of proof shall be the owner’s, by a preponderance of the evidence. (Ord. 680 § 1(part), 1998).

19.14.130 Review by the city council.

The city council shall review the effectiveness of this chapter in addressing the problems giving rise to its enactment at least one year from its enactment. Notice of the time and place of the city council’s review shall be published at least ten days prior to said date in a newspaper of general circulation in the city of Cotati. (Ord. 680 § 1(part), 1998).

19.14.140 Severability.

The ordinance enacting this chapter shall be liberally construed to achieve its purposes and preserve its validity. If any provision or clause of this chapter or application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable and are intended to have independent validity. (Ord. 680 § 1(part), 1998).

19.14.150 Vacancy control and de-control – Establishment of new base rent.

A. Except as otherwise provided in this section, a mobilehome park owner shall not charge a new base rent or increase the rent for a mobilehome space because that space has become vacant or the tenancy with respect to that space has terminated. A mobilehome park owner shall be permitted to charge a new base rent for a mobilehome space whenever a lawful space vacancy occurs. For purposes of this chapter, a lawful space vacancy is defined as follows:

1. A vacancy of the mobilehome space occurring because of the termination of the tenancy of the affected mobilehome tenant in accordance with the Mobilehome Residency Law, California Civil Code Sections 798.55 through 798.60, as amended; or

2. A vacancy of the mobilehome space arising from the voluntary removal of a mobilehome from the mobilehome space by the affected mobilehome tenant. A removal of the mobilehome from the space for the purpose of performing rehabilitation or capital improvements to the space or for the purpose of upgrading the mobilehome or purchasing a new, substitute mobilehome for occupancy by the same tenant shall not constitute a voluntary removal of the mobilehome. A removal of the mobilehome from the space for the purpose of performing repair and/or improvement to the space and/or for the purpose of repairing, maintaining or replacing the mobilehome due to the damage thereof shall not constitute a voluntary removal of the mobilehome.

B. When a new base rent is established following the vacancy of a mobilehome space pursuant to this subsection, the park owner shall give written notice to the new affected mobilehome tenant of the twelve-month anniversary date for rent increases allowed under Section 19.14.004 and shall give written notice to such affected tenant that the space rent may be subject to stabilized rent increases pursuant to the provisions of this chapter.

C. In the absence of a lawful vacancy of the mobilehome space, a park owner is prohibited from raising rent upon a sale of a mobilehome on site to a tenant-to-be or current tenant. (Ord. 680 § 1(part), 1998).