Jackson Municipal Code Ch. 5.60 Mobile Home Rent Protection

Note: Prior ordinance history: Ord. No. 563.

A. There is presently within the city 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.

B. After studying the city's mobile home rental situation thoroughly and then considering what type of mobile home rent control ordinance is needed in the city, this city council finds and declares it necessary, in the public interest, to facilitate and encourage fair bargaining between mobile home owners and park owners in order to achieve a mutually satisfactory agreement regarding space rental rates in mobile home parks.

C. The intent of the city council in enacting the ordinance codified in this chapter is to curb excessive and unreasonable rent increases on mobile home owners, to prevent an exploitation of the current widespread shortage of mobile home spaces within the city, to counteract the ill effects of rapidly rising and exorbitant rents exploiting the housing shortage, to permit mobile home park owners to receive a just and fair return, and to establish a process for resolution of rental disputes between park owners and homeowners.

(Ord. 598, 1997; Ord. 662, 2009)

For the purpose of this chapter, the following words and phrases shall be defined as follows:

"Capital improvements"

means the installation of new improvements and facilities and/or replacement or reconstruction of existing improvements and facilities which consist of more than ordinary maintenance and/or repairs.

"Homeowner"

shall have the meaning set forth in California Civil Code Section 798.9, as it may be amended in the future.

"Increase increment"

means any rental increase approved either automatically, through negotiation between park owners and home owners, or by the arbitrator.

"Mobile home"

shall have the meaning set forth in California Civil Code Section 798.3, as it may be amended in the future.

"Mobile home park"

shall have the meaning set forth in California Civil Code Section 798.4, as it may be amended in the future.

"New Construction"

shall have the meaning set forth in California Civil Code Section 798.7, as it may be amended in the future.

"Park owner"

shall have the same meaning as the term "Management" as defined by California Civil Code Section 798.2, as it may be amended in the future.

"Rehabilitation work"

means any renovation or repair work completed on or in a mobile home park which was performed in order to comply with the direct order of a public agency, or to repair damage resulting from fire, earthquake or other casualty.

"Rent"

means the maximum monthly consideration which may be charged for the use or occupancy of a mobile home space, excluding separate fees, assessments, or charges permitted to be imposed pursuant to California Civil Code Section 798.49 and utilities separately billed in accordance with California Civil Code Section 798.41.

"Rental Agreement"

shall have the meaning set forth in California Civil Code Section 798.8, as it may be amended in the future

"Rent increase"

means any approved increase in rent, including, but not limited to, lease offers and lease renewal offers.

"Resident"

shall have the meaning set forth in California Civil Code Section 798.11, as it may be amended in the future.

"Tenancy"

shall have the meaning set forth in California Civil Code Section 798.12, as it may be amended in the future.

(Ord. 598, 1997; Ord. 662, 2009)

A. Except as hereinafter provided, an owner shall not demand, accept or retain rent for a mobile home space exceeding the rent authorized by this chapter. Any rent increase approved for any mobile home park pursuant to this chapter for any or all levels in the mobile home park shall be effective on the date of approval.

B. Base rents shall be those in effect as of August 25, 1997.

(Ord. 598, 1997; Ord. 662, 2009)

The following exemptions from this chapter shall apply:

A. New construction shall be exempt from application of this chapter in accordance with California Civil Code Section 798.45.

B. Except in any of the circumstances set forth in California Civil Code Section 798.21(f), this chapter shall not apply to a mobile home space within a mobile home park which is not the principal residence of the homeowner, as long as the homeowner has not rented the mobile home to another party. A mobile home shall be deemed to be the principal residence of the homeowner, unless a review of state or county records demonstrates that the homeowner is receiving a homeowner's exemption for another property or mobile home in this state, or unless a review of public records reasonably demonstrates that the principal residence of the homeowner is out of state.

C. Agreements in excess of twelve months involving the actual and personal residence of the homeowner are exempt from this chapter in accordance with California Civil Code Section 798.17. The terms of such a rental agreement prevail over conflicting provisions of this chapter only during the term of the rental agreement or one or more uninterrupted, continuous extensions thereof. If the rental agreement is not extended and no new rental agreement in excess of twelve months' duration is entered into, the last rental rate charged for the space under the rental agreement is the base rent for that space for purposes of this chapter.

(Ord. 598, 1997; Ord. 662, 2009)

A. Except as herein provided, a park owner shall not demand, accept or retain rent exceeding the rent established under the provisions of this chapter.

B. Except as otherwise provided in this chapter, rent may be increased no more than once a year. Any proposed rent increase within a twelve-month period which exceeds the maximum permitted under Section 5.60.055 shall be subject to the negotiation process under the provisions of Section 5.60.060 of this chapter. When agreement cannot be reached between park owners and homeowners by negotiations, any proposed increase exceeding the maximum permitted shall be subject to formal review hearing under the provisions of Section 5.60.060 and 5.60.065.

C. No rent which is in excess of an amount approved may be collected by the park owner until such time as the increase is approved under the provisions of Section 5.60.055 or 5.60.060 of this chapter.

D. A sale or lease or change in occupancy shall not cause or initiate an increase in the rent of any mobile home space.

(Ord. 598, 1997; Ord. 662, 2009)

The permitted annual rent increase rent shall be calculated by the city, which shall notify each park owner of the amount of the permitted annual rent increase once a year. For purposes of this chapter, CPI shall mean the San Francisco/Oakland/San Jose All Urban Consumers Index. The permitted annual rent increase shall be calculated as follows:

A. The rent shall be increased at a rate equal to one hundred percent of the CPI up to five percent and seventy-five percent of the CPI in excess of five percent calculated as follows:

1. The change in rent shall be calculated by dividing the ending CPI index by the beginning CPI index.

2. If the resulting quotient is equal to or less than 1.05, then it shall be multiplied by the rent. The resulting product shall be the new rent.

3. If the resulting quotient is greater than 1.05, then the difference between the resulting product and 1.05 shall be multiplied by seventy-five percent. The resulting product shall be multiplied by the rent and that product shall be added to the sum derived from subdivision 2 of this subsection.

4. The beginning CPI index shall be the index for the month used as the ending index for the last CPI adjustment.

5. The ending CPI index shall be the index for the month twelve months after the beginning index.

B. It is the intention of this section to allow for automatic increases in rent based on changes in the cost of living as measured by the CPI. The limitations on such increases are intended to minimize the immediate impact drastic changes in the CPI might have on residents. The limitations are not intended to prevent ultimate adjustments to allow park owners to receive a fair return on their investment in their property, as further addressed in Section 5.60.060 of this chapter.

(Ord. 598, 1997; Ord. 662, 2009)

A. In addition to the permitted annual rent increases under Section 5.60.055, a park owner or homeowner may file with the city clerk an application for a rent adjustment. The application shall be submitted in writing and shall state the amount of the adjustment for each space affected and the reasons for the adjustment. Only one rent adjustment may be approved for any mobile home park in any year, whether initiated by application of the park owner or homeowner.

1. An application shall be accompanied by the payment of a fee as may be established (not to exceed the cost of processing the application) from time to time by resolution duly adopted by the city council.

2. An application filed by a park owner shall be accompanied by a statement that the homeowner for each space affected has been served either personally or by mail with a notice describing the application and the change in rent or services.

3. An application filed by a homeowner shall be accompanied by: (i) a statement stating that the park owner has been either personally or by mail served with the application and (ii) a statement designating not more than three persons to act as representatives for the spaces affected and containing the signatures, names and addresses of homeowners representing no less than fifty-one percent of the spaces affected by the application and supporting the application.

4. A statement shall accompany the application and shall notify the receiving party that he or she has fourteen days to file an objection and if one is not filed within the time allowed, then the application will be automatically granted.

B. An objection to the application may be filed with the city clerk within fourteen days after the notice of application has been served. The objection shall identify the portions of the application objected to and shall state the grounds of the objection.

1. A copy of an objection filed by a park owner shall be mailed to each of the designated homeowner representatives.

2. A copy of an objection filed by a homeowner shall be mailed to the park owner. The homeowner's objection shall designate not more than three persons to act as representatives for the objecting homeowners. The objection must be accompanied by a statement containing the signatures, names and addresses of homeowners representing no less than fifty-one percent of the spaces affected by the park owner's application and verifying that they object to the application.

C. If no objection is filed to an application within the time allowed, or if less than fifty-one percent of the homeowners support an objection to an application, the application will be automatically granted.

D. If an objection is filed within the time provided, then the park owner and the homeowner representatives shall meet and confer to negotiate in good faith an agreement regarding the application. Either party may request a mediator of their choice to assist in the negotiations, but this is not required. If an agreement is reached within twenty-one days, then the homeowner representatives shall notify all homeowners affected by the agreement. The homeowners shall have seven days to approve or disapprove the agreement. If homeowners representing no less than fifty-one percent of the spaces affected fail to disapprove of the agreement, then the agreement shall be binding on the park owner and all homeowners affected. The city clerk shall be notified that an agreement has been reached. The statements made in negotiations and any agreement reached but not approved shall be admissible in any subsequent hearings regarding the application.

E. If the park owner and the homeowner representatives fail to reach an agreement within the time provided, or if a majority of the homeowners disapprove of an agreement reached, then the applicant shall within seven days of such determination notify the city manager that an agreement has not been reached. The city shall have on retainer as an independent consultant hearing officer(s) to provide arbitration services. Upon notification to the city manager that an agreement has not been reached, the city manager shall notify its hearing officer of the need for arbitration services. The consultant shall, through its usual means, assign a hearing officer to arbitrate the matter. Assignment of the hearing officer shall be completed no later than twenty-one days after filing of the notice that an agreement has not been reached.

(Ord. 598, 1997; Ord. 662, 2009)

A. After the city manager has been notified that an agreement has not been reached and its consultant has assigned a hearing officer in accordance with Section 5.60.060(E), the hearing officer shall set a hearing on the application complying with the requirements of this section no less than ten days and no more than twenty-one days after his or her appointment. The hearing officer shall notify the park owners and homeowner representatives, in writing, of the time, place and date set for the hearing. No hearing or any part thereof may be continued beyond thirty days after the initial hearing date, without the applicant's written consent.

B. All review hearings conducted by the hearing officer shall be conducted in accordance with the Ralph M. Brown Act at Section 54950 et seq. of the California Government Code.

C. All interested parties to a hearing may have assistance from an attorney or such other person as may be designated by the parties in presenting evidence or in setting forth by argument their position. All witnesses shall be sworn in and all testimony shall be under penalty of perjury.

D. In the event that either the park owner or the homeowner(s) should fail to appear at the hearing at the specified time and place after receipt of written notice thereof, the hearing officer may hear and review such evidence as may be presented and make such decisions as if all parties had been present.

E. After the hearing, the hearing officer may:

1. Permit the requested adjustment to become effective, in whole or in part; or

2. Deny the requested adjustment; or

3. Permit or deny, in whole or in part, requested reductions of, or charges for, facilities or services.

F. The hearing officer's decision shall be based on the applicable criteria set forth in Section 5.60.068 below. The hearing officer's decision shall contain express findings and shall be made in writing no later than ten days after the conclusion of the hearing. The hearing officer's decision shall be based on the preponderance of the evidence submitted at the hearing. All parties to the hearing shall be advised by mail of the hearing officer's decision and findings.

G. Any decision of the hearing officer shall be final unless, within ten days after mailing of the decision and findings, the owner or any affected homeowner appeals the decision to a court of competent jurisdiction.

H. The hearing officer's actual charges shall be paid by the city and charged back to the original applicant.

(Ord. 598, 1997; Ord. 662, 2009)

A. Substantive Grounds for Rent Adjustment Applied for by Park Owner. A park owner's application for a rent adjustment shall be approved when it is determined necessary in order to provide a just and reasonable return on a park owner's investment. Such a determination is appropriate when the adjustment is necessary to maintain the park owner's net operating income at the same level as the base year in accordance with the following:

1. Net operating income (NOI).

a. Net operating income equals gross income minus operating expenses.

b. Gross income equals the following:

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

ii. Interest from security and cleaning deposits (except to the extent that such interest is payable to the homeowners/residents); plus

iii. Income from services, garage and parking fees; plus

iv. All other income or consideration received or receivable for or in connection with the use or occupancy of rental spaces and housing services; minus

v. Uncollected rents due to vacancy and bad debts to the extent the same are beyond the landlord's control. Uncollected rents in excess of three percent of gross rents shall be presumed to be unreasonable unless established otherwise.

c. Operating Expenses—Inclusions.

i. Operating expenses shall include the following: license fees, real property taxes, utility costs, insurance, maintenance, and management expenses (contracted or owner performed), including necessary and reasonable advertising, accounting, other managerial expenses, normal repair and maintenance expenses, allowable legal expenses, and the amortized cost of capital improvements. Unless established otherwise, management expenses are presumed to be six percent of gross income.

ii. Owner-performed labor shall be counted at reasonable rates as established by city council regulation.

iii. Building improvements, major repairs, replacement and maintenance subject to the condition that said expenses shall be amortized in accordance with city council regulations, except to the extent such costs are compensated by insurance proceeds.

d. Excluded from Operating Expenses.

i. Operating expenses shall not include: avoidable and unnecessary expense increases since the base year, mortgage interest and principal payments, fees, penalties and interest awarded for violation of this or any other law, or legal fees except as provided in this subsection and depreciation of the property.

ii. Allowable legal expense shall include attorney's fees and costs only to the extent permitted by law incurred in connection with successful good faith attempts to recover rents owing and successful good faith unlawful detainer actions not in violation of applicable law, to the extent the same are not recovered from homeowners/residents. attorney's fees and costs incurred in proceedings before the hearing officer, or in connection with civil actions against the hearing officer, are not allowed as operating expenses, unless required by law.

e. Base year for the purpose of this Section 5.60.068 shall be 1995.

f. Presumption of Fair Base Year Net Operating Income. Except as provided in paragraph g of this subdivision, it shall be presumed that the net operating income produced by the property during the base year provided a fair return (fair net operating income). Landlords shall be entitled to earn a just and reasonable return and to maintain and increase their base year net operating income in accordance with paragraph h of this subdivision.

g. Rebutting the Presumption. It may be determined that the base year net operating income yielded other than a fair return, in which case, the base year net operating income may be adjusted accordingly. In order to make such a determination, the hearing officer must make at least one of the following findings:

h. The landlord's operating and maintenance expenses in the base year were unusually high or low in comparison to other years. In such instances, adjustments may be made in calculating such expenses so that the base year operating expenses reflect average expenses for the property over a reasonable period of time. In considering whether the base year net operating income yielded more or less than a fair net operating income, the hearing officer shall consider the following factors:

(A) The landlord made substantial capital improvements during the base year, which were not reflected in the base year rent levels;

(B) Substantial repairs were made due to damage caused by uninsured disaster or vandalism;

(C) Maintenance and repair were below accepted standards so as to cause significant deterioration of housing services;

(D) Other expenses were unreasonably high or low notwithstanding prudent business practice.

i. Fair Net Operating Income. Approval by the hearing officer of a rent increase in the amount of sixty percent of the total percentage increase in the CPI over the base year shall be presumed to create a fair Net Operating Income unless this presumption is rebutted by a preponderance of the evidence presented at the hearing on the park owner's application for a rent increase. (For example, if the CPI has increased by ten percent since the base year, the landlord shall be entitled to a net operating income which is six percent above the base year level.) A rent increase granted pursuant to this section shall not exceed the increase requested in the application. For the purposes of this Section 5.60.068, the current CPI shall be the CPI last reported as of the date of the application.

B. Substantive Grounds for Rent Adjustment Applied for by Homeowner. A homeowner's application for an adjustment of the rent shall be approved when it is determined that a reduction in rent will not cause the park owner to be unable to receive a just and reasonable return on its investment. Such a determination is appropriate when the adjustment may be made without reducing the park owner's Net Operating Income from the base year level. This may occur in the event that the park owner's operating expenses have been reduced, due to a decrease in costs or a reduction of services provided within the mobile home park. However, in no case shall an adjustment of the rent be approved such that the rent is lower than the base rent plus the current permissive rent increase pursuant to Section 5.60.055. Therefore, in most circumstances, a home owner's application for adjustment to reduce rent may be approved only where a park owner's application for a rent increase above the base rent and permissive rent increase was approved in a prior year.

(Ord. 598, 1997; Ord. 662, 2009)

A homeowner may refuse to pay any rent in excess of the rent approved under this chapter. The fact that such unpaid rent is in excess of the rent approved shall be a defense in any action brought to recover posses-sion of a mobile home space for nonpayment or collection of rent.

(Ord. 598, 1997; Ord. 662, 2009)

Any person who demands, accepts or retains any payment of rent in violation of the provisions of this chapter, shall be liable in civil action to the person from whom such payment is demanded, accepted or retained, for damages up to an amount equal to three times the payment(s) demanded, accepted or retained, together with reasonable attorney's fees and costs, as determined by the court.

(Ord. 598, 1997; Ord. 662, 2009)

The ordinance codified in this chapter shall be in effect until June 30, 2030.

(Ord. 598, 1997; Ord. 662, 2009; Ord. 716, §2, 2020)

This chapter shall be subject to the Mobilehome Residency Law and all state laws pertaining to rent control, and any inconsistency shall be resolved against this chapter.

(Ord. 598, 1997; Ord. 662, 2009)