Montclair Municipal Code Ch. 4.60 Mobile Home Rent Regulation

A. The conditions which caused the City to adopt the provisions of this chapter regulating rent increases for spaces in mobile home parks continue to exist. Mobile home owners, unlike apartment tenants or residents of other rental stock, are in the unique position of having made a substantial investment in a mobile home for which they must rent a space in a mobile home park. Alternative sites for the relocation of mobile homes are difficult to find due to the shortage of vacant spaces; the restrictions on the age, size or style of mobile homes permitted in many parks; and requirements related to the installation of mobile homes, including permits, landscaping, and site preparation. Additionally, the cost of moving a mobile home is substantial and the risk of damage in moving is significant. The result of these conditions is the creation of a captive market of mobile home owners and tenants. Their immobility, in turn, contributes to the creation of an imbalance in the bargaining relationship between park owners and mobile home park tenants. Because mobile homes are often owned by senior citizens, persons on fixed incomes, and persons of low and moderate income, exorbitant rent increases fall upon these individuals with particular harshness.

B. The purpose of this chapter and the amendments in this chapter is to protect mobile home owners from excessive space rent increases and also protect the mobile home owners' investments in their mobile homes, while at the same time providing a just and reasonable return to park owners.

C. In administering the existing provisions of this chapter, the City has found that some provisions and procedures should be simplified or clarified in order to implement the purposes of this chapter more efficiently. The amendments in this chapter effect such clarification and simplification and will benefit both mobile home owners and park owners by simplifying rent-adjustment procedures.

D. The City Council has determined that park owners are requiring prospective mobile home owners in mobile home parks located in the City to enter into or assume long-term leases or rental agreements as a condition to locating in the mobile home park. By requiring such long-term leases, which the park owners claim are exempt from local rent control under Civil Code Section 798.17, park owners appear to be attempting to circumvent the benefits and protections provided by the City of Montclair Mobile Home Rent Regulation Ordinance.

E. The City Council has further determined that as a result of the park owners' requirements of long-term leases by prospective mobile home owners, current mobile home owners are having extreme difficulty selling their mobile homes. Prospective purchasers of mobile homes may lose interest in the sale when faced with a long-term lease requirement, which includes a rent schedule not subject to City review or regulation.

F. The City Council has further determined that as a result of the park owners' requirements that prospective mobile home owners sign or assume long-term leases, which may be exempt from City rent regulation, prospective mobile home owners are being precluded from receiving the benefits and protections intended by this chapter.

G. The City Council has further determined that because the current Ordinance provides for "vacancy decontrol" (e.g., permits a park owner to raise space rents without regulation whenever a mobile home located in the park is sold or transferred), certain park owners have informed prospective mobile home owners that his/her initial space rents will be substantially increased above space rents which could be charged to the existing mobile home owner and far in excess of the space rents which could be charged if the space rents were at all times regulated.

Alternatively, certain park owners have used the threat of these increased initial space rents to coerce prospective home owners to enter into long-term leases, which provide for future unregulated space rents far in excess of the space rents which could be charged under this chapter.

The increased space rents on sale or transfer due to vacancy decontrol have discouraged and frustrated sales of mobile homes. In order to sell under such circumstances, many existing home owners have been forced to substantially lower the price of their mobile homes, thereby jeopardizing their investments. Other existing home owners, particularly those who are elderly, are very concerned and worried they also will be unable to sell their mobile homes when the need arises.

The presence of vacancy decontrol has also caused hardship to prospective mobile home owners who have no protection from initial excessive mobile home space rents. In addition, these prospective mobile home owners, no less than existing mobile home owners, need protection against unregulated rent increases when they sell; and the City also has a legitimate interest in protecting the investments that these prospective home owners make in their homes. Prospective as well as existing home owners tend to be either senior citizens living on fixed incomes or young families struggling to pay for their first homes. In either case, both need protection against excessive space rents and for their investments in their mobile homes.

This situation has the potential to cause, if it has not already caused, adverse effects on the health and welfare of Montclair citizens.

H. As a response to the above findings, the City Council has determined that in addition to the protections already provided by this chapter, it is necessary to protect current home owners' investments in their mobile homes by precluding park owners from (1) requiring prospective mobile home owners to sign long-term leases, therefore adversely affecting sales of mobile homes; and (2) raising space rents upon sales or transfers of mobile homes in a park. It is further necessary to (2) protect prospective mobile home owners from excessive rents by providing (1) for lease options in order to give each prospective home owner a real choice between an exempt long-term lease and a lease subject to the protections of this chapter; and (2) that a park owner may not raise space rents upon the sales or transfers of mobile homes in a park. It is further necessary to protect prospective home owners' future investments in their mobile homes by precluding park owners from (1) affecting future sales of such mobile homes through a long-term lease requirement imposed upon the subsequent purchasers; and (2) raising space rents upon sales or transfers of mobile homes in a park.

(Ord. 99-791 Exh. A (part); prior code § 5-19.01)

In addition to the specific duties described elsewhere in this document, the Rent-Review Administrator (RRA) shall:

A. Adopt procedures and guidelines for the implementation of this chapter;

B. Select an Arbitrator for any proceeding under Section 4.60.100 in this chapter;

C. Take all reasonable and necessary measures to effect the purposes and intent of this chapter.

(Ord. 99-791 Exh. A (part); prior code § 5-19.03)

Rents agreed to under a written agreement in existence on July 1, 1985, may be collected until the expiration of the lease agreement.

(Prior code § 5-19.04)

A. A park owner shall not demand, accept or retain rent for a mobile home space exceeding the rent in effect on January 1, 1985, plus any increase of no more than 6 percent which was validly noticed pursuant to Civil Code Section 798.30 between January 1, 1985, and December 18, 1985, except as provided in this chapter.

B. No park owner shall reduce or eliminate any park service to any mobile home space unless and until the cost savings resulting therefrom is passed on to the affected homeowners in rent adjustments approved pursuant to this chapter.

C. This chapter shall not apply to the rent for a mobile home space which is exempt from space-rent regulation pursuant to State or Federal law (e.g., California Civil Code Sections 798.17, 798.21 and 798.45).

(Ord. 99-791 Exh. A (part); prior code § 5-19.05)

A. Notwithstanding any other provisions of this chapter, no park owner shall, upon the sale or transfer of ownership or occupancy of a mobile home located in the park, increase the space rental for such space to an amount greater than the current space rent in effect as of the date of sale or transfer plus a percentage increase of the currently lawfully collected space rent. This percentage increase shall not exceed the greater of: (1) 3 percent or (2) 100 percent of the most current annual CPI percentage increase, up to a maximum of 8 percent.

B. If there was no space rent in effect on the date the ownership or occupancy of a mobile home was transferred, the new space rent shall be the space rent that was charged for that space on the last date that space rent was charged for that space.

(Ord. 99-791 Exh. A (part); prior code § 5-19.06)

No mobile home park owner shall reduce or eliminate any service or benefits to any mobile home space so long as this chapter is in effect, unless and until the cost savings resulting from such reduction or elimination is passed on to the mobile home owner in the form of a decrease in space rent.

(Prior code § 5-19.07)

Notwithstanding any other provision of this chapter, no park owner shall seek a rent increase for the operation, maintenance, installation, upgrading, or replacement of a utility to the extent that the rates authorized to be charged by the park owner to the mobile home owner for that utility already take into account the park owner's costs and need for a fair return in operating, maintaining, installing, upgrading, and replacing such utility.

(Ord. 99-791 Exh. A (part); prior code § 5-19.08)

A. Annual Adjustment. Beginning 60 days after the effective date of Ordinance No. 89-671, the rent for a mobile home space may be increased once each calendar year by 6 percent of the rent lawfully collected during the preceding 12 months or 80 percent of the increase in the CPI during the preceding 12 months, whichever is less, upon application to the RRA. The application may be for one or more spaces and shall be approved by the RRA within 15 days if it complies with this subsection. If the application does not comply with this subsection, the RRA shall notify the applicant of the reason for rejection, in writing, within 15 days of receipt of the application.

B. Rent Adjustment Based on Increase in Certain Costs. An application may be filed with the RRA for a per-space increase for the proportionate share of:

1. An increase in the amount due under a land lease which the park owner is obligated to pay pursuant to a lease made on or before January 1, 1985; and/or

2. An increase in a City special tax, benefit assessment, or service charge, excluding water, sewer and trash.

Only one rent adjustment per calendar year may be granted pursuant to this subsection. The application shall be approved by the RRA within 30 days if it meets the criteria set forth in this subsection. If it does not meet the criteria in this subsection, the RRA shall give written notice of rejection to the applicant within 30 days of receipt of the application specifying the reasons for the rejection.

C. Rent Adjustment Based on Completed Capital Improvements. An application may be filed for a rent adjustment based on completion of a "capital improvement" as defined by Chapter 4.02. This application shall be approved by the RRA pursuant to this subsection if:

1. The park owner has consulted with the park mobile home owners prior to initiating construction of the improvements regarding the nature and purpose of the improvements and the estimated cost of the improvements;

2. The park owner has obtained the prior written consent of at least one adult resident from a majority of the mobile home rental spaces subject to this chapter. Evidence of such consent must be presented at the time of filing the application seeking a rent adjustment based on such a capital improvement expenditure; and

3. The application satisfies the definition of "capital improvement" in Chapter 4.02. Any increase granted shall be amortized over the useful life of the improvement and apportioned equally among all the rental spaces in the mobile home park by dividing the verified cost of the improvement by its useful life (in years), dividing that result by 12 and further dividing that result by the total number of affected spaces in the mobile home park. Any rent increase granted under this subsection shall remain in effect only during the useful life of the improvement. If the RRA determines that a rent increase application filed under this subsection meets the criteria in this chapter, the rent increase shall be granted within 30 days of receipt of the application. If the RRA determines that the application does not meet the criteria set forth in this chapter, the RRA shall give written notice thereof, specifying the reason for rejection, within 30 days of receipt of the application.

D. Rent Adjustment Based on Termination or Reduction of Services. A park owner may apply to decrease or eliminate park services to a mobile home space or spaces based upon a rent decrease equal to the cost savings effected by the decrease in, or elimination of, park services to a mobile home space or spaces. An affected home owner or home owners may also file an application for a rent decrease based on a decrease or elimination of park services. The application shall be approved by the RRA if the rent decrease proposed equals the cost savings, apportioned among the affected spaces, of the park service which has been reduced or eliminated. If a mobile home park owner who provides utility services reduces or eliminates such service by separate metering, or other lawful means of transferring to the resident the obligation for payment for such services, the cost savings shall be deemed to be the cost of such transferred utility service for the 12 months prior to the installation and use of the submetering system. The RRA shall deny or approve the application, with or without modifications, and shall give written notice thereof to the applicant within 30 days after it has been filed.

E. Any application under subsections A, B, C or D of this section may be rejected on the grounds that it is not complete. Written notice, specifying the information needed to complete the application, shall be given to the applicant within the time period specified in the relevant subsection for acting on the application.

F. A decision of the RRA pursuant to subsections A through D of this section may be appealed to the City Council by filing an application therefor with the RRA within 15 days of the date the notice rejecting the application, denying the increase, or granting a modified increase was mailed. The application shall be filed on a form prescribed by the RRA and shall be accompanied by an application fee of One Hundred (100) Dollars and a statement setting forth specifically wherein the RRA's findings and decision are claimed to be in error and failed to follow the provisions set forth in this chapter. The appeal shall be considered and determined by the City Council within 30 days of its filing with the RRA. Notice of the date the appeal will be heard shall be mailed to the park owner and affected home owners within five days after the appeal is filed. The notice shall inform the affected owner and residents of the right to file a written statement in response to the appeal no later than 10 days prior to the date the appeal will be considered. No new evidence, testimony or argument will be considered on appeal and the City Council shall be limited to considering the material submitted to the RRA and any statements filed concerning the appeal. The City Council may grant the appeal, in whole or in part, deny the appeal or modify the decision of the RRA. Any such appeal shall be governed by the procedures in Section 4.60.110 of this chapter.

G. Before an application for a rent increase under this section will be deemed complete, the mobile home park owner shall submit to the RRA copies of all current leases between the park owner and mobile home owners in the park in order that the RRA can verify which spaces, if any, are exempt from this chapter under Civil Code Section 798.17 or any other provision of any applicable statute or ordinance.

(Ord. 99-791 Exh. A (part); prior code § 5-19.09)

A. An application may be filed with the RRA for a rent adjustment for one or more spaces in a mobile home park in addition to the rent adjustments permitted under Section 4.60.080 pursuant to the mediation procedures of this section. The application shall be on a form prescribed by the RRA and shall specify the address and numbers of all spaces for which a rent adjustment is sought. All applications shall be verified under penalty of perjury.

B. Mediation of the rent adjustment shall be conducted by the Park Mediation Committee, which shall be composed of two members of representatives of the park owner, two members designated by a majority vote of the affected home owners, with one vote per mobile home space, and one mediator appointed by the RRA. The mobile home owners in each mobile home park in the City shall select designated representatives to serve on the Park Mediation Committee within 30 days of the effective date of this chapter.

C. The RRA shall appoint a mediator and mail a notice of the application to the members of the Park Mediation Committee, the mobile home park owner, and the affected home owners within five days of receipt of the application. Such notice shall include the amount of the requested rent adjustment and a brief summary of the justification for the request.

D. The Park Mediation Committee shall establish procedures for the conduct of its affairs not otherwise in conflict with the provisions of this chapter. Three affirmative votes shall be required to take or effect any action. The Park Mediation Committee shall meet and confer on the rental adjustment application within 20 days from the date the notice set forth in subsection C of this section was mailed to the Committee.

E. If the Park Mediation Committee fails to reach an agreement within 20 days from the date of the filing of notice set forth in subsection C of this section, written notice of this fact shall be given forthwith to the park owner and affected residents.

F. If the Park Mediation Committee reaches a proposed agreement, written notice thereof shall be given forthwith by mail or personal delivery to all of the affected home owners of the park and the park owner. Within five days of the date such notice was mailed or delivered, the affected home owners shall vote on the proposed agreement by a secret ballot, with one vote per mobile home space.

G. If at least 50 percent plus one of the affected mobile home spaces of the park approve the agreement and the park owner approves the agreement, then it shall be deemed approved. If fewer than 50 percent plus one of the affected mobile home spaces of the park vote in favor of the agreement, or the park owner rejects the agreement, then it shall be deemed disapproved. The results of the vote shall be supplied to the RRA on the date the vote is completed. Unoccupied spaces shall not be counted in determining the percent required for approval.

H. If the agreement is approved as provided in subsection G of this section, it shall be implemented in accordance with the terms of the agreement and any applicable law.

I. If the agreement is rejected as provided under subsection G of this section, or if no agreement is reached, the park owner may request arbitration pursuant to Section 4.60.100 of this chapter by filing an application for arbitration within 10 days of the mailing of the notice of rejection.

J. All applications submitted under this section shall be deemed rejected if the Park Mediation Committee fails to negotiate a proposed agreement relating to a proposed rental adjustment within 25 days of the date of mailing the notice set forth in subsection C of this section.

(Ord. 99-791 Exh. A (part); prior code § 5-19.10)

A. If a mediated settlement pursuant to Section 4.60.090 is not reached, a park owner may file a rent-adjustment application with the RRA for one or more mobile home spaces pursuant to this section. Only one increase per calendar year may be granted under this section, but rent adjustments granted pursuant to Section 4.60.080 shall not preclude an adjustment pursuant to this section. The application shall be filed within the time period specified in Section 4.60.090(I).

B. An application for a rent adjustment pursuant to this section shall be filed upon a form prescribed by the RRA and shall be accompanied by the payment of a fee of Ten (10) Dollars per space for which an application for a rent adjustment is made. The fee shall be applied toward the costs of arbitration. Any additional costs shall be borne equally by the park owner and the affected home owners. If any part of the Ten (10) Dollars per space application fee exceeds the cost of arbitration, it shall be refunded to the applicant. Such application shall specify the address of the mobile home park, the space number or numbers for which rent is requested to be adjusted, the amount of the requested rent adjustment, and the facts supporting the requested adjustment.

C. The RRA shall establish a panel of Arbitrators to serve as an Arbitrator in rent adjustment matters. Within 10 days of receipt of an arbitration application, the RRA shall give written notice of the appointment of an Arbitrator to the park owner and affected home owners by mail or personal delivery. At the same time, the RRA shall mail a copy of the adjustment application to the affected home owners together with a notice of the right to submit a written response to the application within 15 days of the date of mailing the notice.

D. The hearing by the Arbitrator shall be held not sooner than 20 days and not more than 30 days after the date the notice of appointment of Arbitrator is mailed or delivered to the park owner and affected homeowners.

E. The applicant shall produce, at the request of the Arbitrator, any records, receipts, or other documents that the Arbitrator may deem necessary for a full disclosure of facts. The arbitration application shall be made under penalty of perjury and supporting documents shall be verified under penalty of perjury if requested by the Arbitrator.

F. At the hearing, the park owner and the affected home owners may offer any testimony relevant to the requested rent adjustment. The applicant shall produce any records, receipts, or other documents that the Arbitrator may deem necessary to approve a rent adjustment. The parties to the arbitration may offer documents, written declarations, or other written evidence for the first time at the hearing only if good cause is shown why such evidence was not filed prior to the hearing. Formal rules of evidence shall not be applicable to such proceedings; however, evidence to be admissible shall be of the type upon which responsible persons are accustomed to rely in the conduct of serious affairs. The Arbitrator shall have the power to administer oaths and affirmations. The party requesting the arbitration shall present his/her/its position first and shall have the burden of proof at the hearing. The parties may be represented by counsel or other spokesperson; however, only one spokesperson may be designated for each party.

G. The Arbitrator shall approve such rent adjustments as he/she determines to be just, fair and reasonable. The Arbitrator shall consider, but is not to be limited to, the following factors in making such determinations:

1. Changes in the CPI for the latest 12 month period ending at least 30 calendar days prior to the application for the proposed increase;

2. The rent lawfully charged for comparable mobile home spaces in the City and the surrounding communities;

3. Prior rent adjustments of the park and any prior arbitration proceedings;

4. Changes in property taxes and other taxes related to the subject mobile home park;

5. Changes in the rent paid by the park owner for the lease of the land on which the subject mobile home park is located;

6. Changes in the utility charges for the subject mobile home park;

7. Changes in operating and maintenance expenses;

8. Changes in the park services provided to the affected home owners; and

9. A just and reasonable return on the park owner's investment, except that increased investment due to acquisition of the park after December 1, 1985, shall not be considered grounds for a rent increase.

H. The costs incurred by the parties in proceedings under this section shall not be recoverable by either party nor justification for a rent adjustment.

I. The Arbitrator's decision shall be in writing and shall include findings of fact on the factors relied upon in reaching a decision. The Arbitrator's decision shall be mailed to the park owner and all affected homeowners within 10 days of the close of the hearing. Any appeal thereof must be filed with the RRA within 10 days of the date notice of the Arbitrator's decision is mailed or delivered to the park owner and affected homeowners.

(Ord. 99-791 Exh. A (part); prior code § 5-19.11)

A. An appeal of the RRA's decision pursuant to Section 4.60.080 or the Arbitrator's decision pursuant to Section 4.60.100 shall be filed within the time periods specified in those sections.

B. The appeal shall be filed with the RRA in triplicate and shall set forth specifically wherein the Arbitrator's findings were in error and wherein the Arbitrator failed to follow the policies or standards set forth in this chapter.

C. Notice. The RRA shall mail the statement of appeal and notice of the date the appeal will be considered by the City Council to each affected home owner and to the park owner within five days of receipt of the statement of appeal.

D. Written Response. Affected home owners and the park owner shall have 15 days after the date of mailing the notice of hearing within which to submit to the RRA written responses, points and arguments concerning the appeal. No new evidence or documents shall be submitted; and the appeal to the City Council shall be limited to the evidence and material submitted to the Arbitrator or considered by him or her in reaching his or her determination as well as the written response, points and arguments submitted by the affected home owners and park owner. There shall be no oral testimony nor oral argument before the City Council.

E. The City Council shall consider and determine the appeal no later than 30 days after receipt thereof by the RRA.

F. Decision. The decision of the RRA or the Arbitrator shall be sustained unless the City Council finds and determines that the RRA or the Arbitrator failed to follow the procedures and guidelines established in this chapter for determination of a rent adjustment or that such determination is not supported by substantial evidence.

(Ord. 99-791 Exh. A (part); prior code § 5-19.12)

Any party who is aggrieved by the decision of the City Council may seek review of that decision pursuant to Code of Civil Procedure Section 1094.5 et seq.

(Prior code § 5-19.13)

A. Expiration of Lease or Rental Agreement. Upon expiration of a current lease or rental agreement, or upon entering an initial rental agreement, a "mobile home owner" or a "prospective mobile home owner," as defined in Chapter 4.02, shall be offered a lease or rental agreement for (1) a term of 12 months; (2) a lesser period as the home owner may request; or (3) a longer period as mutually agreed upon by both the home owner and management.

B. No Requirement for Assumption of Lease. No lease or rental agreement or other contract entered into after the effective date of this chapter (April 5, 1994) shall require a "prospective mobile home owner" as defined in Chapter 4.02 to assume a lease. Any provision which requires a prospective mobile home owner to assume a lease as a condition of residence in a park shall be void.

C. Long-Term Leases Exempt from Rent Regulation. Spaces in a mobile home park subject to lease or rental agreements which are otherwise valid and meet all the specific criteria of Civil Code Section 798.17 are exempt from local rent control regulation under State law. Any lease agreements not meeting the specific requirements of Civil Code Section 798.17, or which are otherwise invalid, shall not be exempt from this chapter.

(Prior code § 5-19.14)

A. Mobile home park owners shall pay to the City an annual user fee, as may be established by resolution of the City Council, for each mobile home rental space within the park, except such spaces that are exempt from such fee under applicable law (e.g., Civil Code Section 798.17(e)). The annual user fee shall be paid by June 1st of each year. Along with the fee, the mobile home park owner shall, if he/she has not already done so within the calendar year in connection with a rent increase application, submit to the RRA copies of all current leases between the park owner and mobile home owners in the park in order that the RRA can verify which spaces, if any, are exempt from this chapter under Civil Code Section 798.17. If the park owner claims exemption from this chapter under any other provision (e.g., Civil Code Section 798.21 or 798.45), he/she shall also provide the RRA with sufficient documentation so that any additional exemptions may be verified.

B. Park owners shall be permitted to pass through to each affected space of the park the first Twenty-Five (25) Dollars of the user fee. The City Council shall determine by resolution any allowable pass-through adjustment of the registration fee over and above Twenty-Five (25) Dollars. Absent such resolution, park owners shall not be permitted to pass through any portion of the user fee beyond Twenty-Five (25) Dollars per affected space.

C. If a park owner does not pay the fee provided for in subsection A of this section within the time period established therein, a late charge shall be assessed in an amount equal to One (1) Dollar for each mobile home rental space within the park for each month or fraction thereof that such payment is delinquent.

D. No application will be accepted from any park owner for a space-rent adjustment of any kind, no hearing or other proceeding shall be scheduled or take place, and no space rent adjustment shall be granted or take effect for any mobile home park for which there is an unpaid user fee.

E. The user fee provided by this section is intended to defray costs associated with the general administration of this chapter and is not intended to replace or preclude additional fees and costs associated with specific rent-adjustment applications (e.g., Sections 4.60.080(B) and (F)).

F. The City Manager is directed to maintain an accurate accounting of all direct and indirect costs of administering the regulations contained in this chapter. The City Manager shall submit a report to the RRA and City Council of such costs and any recommendation for a change in the user fee at least annually from and after the effective date of this chapter.

(Ord. 99-791 Exh. A (part); prior code § 5-19.15)