Pismo Beach Municipal Code Ch. 5.20 Mobilehome Park Rent Control Regulations

A. In November 1982, the city council adopted Ordinance No. 305, a "mobilehome rent stabilization ordinance ...*providing a formula for maximum annual rent increases and providing a procedure for hardship exceptions," the provisions of which were set forth in former Sections 5.20.010 through 5.20.060 of this code. In November 1982, all of the mobilehome parks in the city were owned by private parties who operated their parks as a for-profit business and who did not reside in the parks.

B. The findings and declaration of purpose set forth in Ordinance No. 305 referred to the following conditions: the shortage of mobilehome spaces in the city and surrounding areas and the corresponding low vacancy rate in mobilehome parks, the high cost and impracticality of individual homeowners moving their mobilehomes from one park to another, the substantial investment of mobilehome owners in their homes, and the large numbers of residents in the mobilehome parks who were senior citizens and others on fixed incomes for whom there was a lack of suitable alternative housing. In view of these factors, the city council found and declared in Ordinance No. 305 that it was "necessary to take action to protect the owners and occupiers of mobilehomes from unreasonable rent increases, while at the same time recognizing the need of mobilehome park owners to make a suitable profit on the operation of mobilehome parks in Pismo Beach, with rental increases sufficient to cover increased operating costs such as repairs, maintenance, insurance, utilities, general upkeep*...*and to receive a fair return on the owner's property."

C. In the middle 1980s, the ownership of each of the mobilehome parks in the city changed hands. At the time, Ordinance No. 305 had been in effect for several years and regulated the rents in all or substantially all of the mobilehome spaces in the parks.

D. One of the parks was purchased by a corporation whose shareholders were/are mobilehome owners in and residents of that park (the "resident-owned park"). While a majority of the spaces in the resident-owned park are occupied by shareholders of the corporation which owns the park and such resident owners do not pay rent, a significant number of spaces in the resident-owned park remain as rental spaces. The rental spaces in the resident-owned park were and remain subject to mobilehome rent stabilization.

E. Increasingly, the owners of mobilehome parks in the city, including the resident-owned park, sought rent increases in excess of the automatic "seventy-five percent of CPI" increase allowed by the formula in Ordinance No. 305, pursuant to the "hardship exception" in Ordinance No. 305. The basis for a hardship exception rent increase under Ordinance No. 305 was a showing that the park owner was "unable to make a reasonable profit and return on the property involved."

F. In support of the requested hardship exception rent increases, the park owners have asserted various different rationales and arguments. Such requested hardship exception rent increases were vigorously opposed by park tenants, and the rent hearings before the city council were very controversial and adversarial.

G. Following hearings on requested hardship exception rent increases in fall 1991, and pursuant to Section 5.20.050 of this code, a subcommittee of the city council was formed and studied the substance and procedures of the Ordinance No. 305 in detail, conducted a number of meetings with the park owners and their representatives and with the representatives of mobilehome owners, presented several reports with supporting materials to the city council and made a variety of recommendations to the city council. The city council conducted three public hearings in review of the subcommittee's reports and recommendations, and received extensive public comment.

H. The city council finds and declares:

1. The original conditions which prompted adoption of Ordinance No. 305 (set forth in subsection B of this section) have not disappeared and there is a continuing need to regulate mobilehome park rents in response to each of such conditions. While the regulation of mobilehome

park rents is necessary to protect mobilehome owners from unreasonable rent increases, park owners need to receive rent increases which are sufficient to cover increased operating costs and the costs of capital repairs and to provide a fair profit and return on the owner's property.

2. It is in the public interest to retain the concept of limiting the automatic annual rent increase to a seventy-five percent of CPI increase, but to define more specifically how increases in base rent in excess of seventy-five percent of the CPI should be calculated and how capital expenses of the park should be treated in relation to such rent calculations.

3. The prior conduct of the park owners provides a ready basis for determining what is a fair profit and return for each of the mobilehome parks in the city. The park owners presumably knew the income and expenses of their parks at the time they purchased them and believed that the rent-controlled income of the park at that time less its operating expenses at that time would yield a fair operating profit and return. If the mobilehome park's operating income is maintained at approximately the level of operating income at the time the park owners purchased their parks in the mid-1980s, with adjustments for inflation, then the park owners will be receiving a fair profit and return. Therefore, increases in base rent in excess of seventy-five percent of CPI should be permitted if such increases are necessary to maintain the mobilehome park's net operating income adjusted for inflation and thereby provide a fair profit and return to the park owner.

4. The basic concept of defining a minimum fair profit and return by maintaining net operating income of a mobilehome park has been reviewed and upheld in the courts and adopted into rent stabilization ordinances in other jurisdictions. However, the concept was not proposed by park owners in their recent hardship exception rent increase applications.

5. As a practical matter, it is necessary to define and implement the maintenance of net operating income concept on per space basis in the mobilehome parks in the city because the resident-owned park includes both rental and nonrental spaces and the number of rental spaces in such park has been decreasing over the years (as purchasers of mobilehomes in former rental spaces have also purchased shares in the resident-owned corporation).

6. As parks age, large capital expenses become increasingly necessary and inevitable. Expressly providing for rent increases to reimburse park owners for capital expenses is intended to assure that, over the long run, the condition of the park is maintained and kept up for the benefit of its residents. There are two purposes in calculating rent increases for capital expenses separately from maintenance of net operating income increases in base rent:

a. To assure homeowners that rent increases for capital expenses (one-time expenditures which are subject to wide fluctuation from year to year) will be charged to homeowners only for so long as necessary to reimburse such expenses, that capital expenses will not result in permanent increases in base rent, and that capital expense rent increases are not subject to being "compounded" by automatic annual seventy-five percent of CPI increases; and

b. To assure park owners that capital expenses will be reimbursed fully and do not reduce net operating income of the park below the amount necessary to provide a fair return.

7. It is in the public interest to alter the procedures governing rent increases in excess of seventy-five percent of CPI increases, which now provide for a hearing before the city council at city expense on every proposed rent increase in excess of seventy-five percent of the CPI. Such modified procedures should include (a) provisions for recovery of the city's cost of rent hearings, which in ordinary circumstances should be paid in equal shares by the tenants as a group and by the park owner, (b) better-defined requirements for financial reporting and information from park owners, (c) procedures requiring that park owners and tenant representatives meet and confer regarding rent increases in excess of seventy-five percent of the CPI, including the disclosure of the financial information used to calculate the rent increase, with incentives to negotiate an agreed rent increase and avoid the expense and divisiveness of an adversarial rent hearing, (d) procedures requiring that a petition for a rent hearing be signed by a homeowner majority before a rent hearing is held, and (e) procedures for selection of an independent hearing officer to conduct and decide rent hearings without the matter coming before the city council. (Ord. 92-17 § 1, 1992: prior code § 9.60.010)

As used in this chapter:

"Base rent" means the amount of monthly rent which is subject to annual CPI rent increases and operating costs increases. "Base rent" does not include rent increases for capital expenses or capital improvements.

"Capital expense" means a repair or replacement of existing facilities or improvements which has an expected life of more than one year, in excess of five thousand dollars. Examples of a capital expense are resurfacing of existing park roadways, replacement of the roof of an existing clubhouse, and replacement of existing utility transmission lines and/or underground pipe systems within the park. (An expenditure which would otherwise be characterized as a capital expense but which is less than five thousand dollars per year shall be treated as a maintenance expense, rather than as a capital expense.)

"Homeowner" means the owner of a mobilehome and tenant of a mobilehome space in a mobilehome park, responsible for paying rent to management.

"Homeowner majority" means the number equal to at least fifty percent of the number of mobilehome spaces in the park which are entitled to cast a vote at the time of voting, plus one space. On voting matters such as petitioning for rent arbitration or approving a capital improvement, each space in a mobilehome park shall be entitled to cast one vote; if there is more than one homeowner for a space, then any of the homeowners may cast the vote for the space. If a homeowner requests that management not provide to homeowner representatives such homeowner's name or mailing address, then such space shall be excluded from the number of spaces in the park for purposes of calculating a homeowner majority.

"Management" means the owner of a mobilehome park or agent or representative authorized to act on behalf of the owner in connection with matters relating to a tenancy in the park.

"Meet and confer session" means an informal meeting between authorized representatives of management and homeowners of the same park for the purpose of discussing a proposed increase in rent and the basis for it.

"Mobilehome," for purposes of this chapter, means and includes a structure designed for human habitation and for being moved on the street or highway.

"Mobilehome park" means an area of land where two or more sites used to accommodate mobilehomes are rented, or held out for rent, for greater than thirty consecutive days.

"New construction" means any newly constructed spaces initially held out for rent after January 1, 1990.

"Once a year" means once every twelve months.

"Park" means the mobilehome park.

"Rent" means any consideration demanded or received in connection with the use or occupancy of any mobilehome space, but exclusive of any amounts paid for the use of the mobilehome dwelling unit itself. Rent includes base rent, capital expense charges (if any) and capital improvement charges (if any). "Rent" does not include charges for the use of coin-operated washers and dryers in park laundry facilities, or charges for storage facilities off the mobilehome site.

"Rules" refers to the rules for mobilehome park rent hearings, adopted by resolution of the city council. (Ord. 03-02 § 1, 2003; Ord. 02-04 §§ 1, 2, 2002; Ord. 92-17 § 1, 1992)

A. The rent control provisions of this chapter shall apply to any mobilehome park where two or more mobilehome sites are rented or held out for rent, subject to the following exemptions set forth in subsection C below.

B. For purposes of enforcement of the rent control provisions under this chapter, the application of this chapter to mobilehome parks, as defined herein, but not meeting the definition of mobilehome park under the Mobilehome Residency Law (Civil Code § 798.4), is intended to be and is prospective from November 1, 2002.

C. Exemptions.

1. Lease in Excess of Twelve Months.

a. i. Rental agreements meeting the criteria of subdivision b shall be exempt from the rent control provisions of this chapter. The terms of a rental agreement meeting the criteria of subdivision b shall be exempted from coverage under this chapter restricting rents in mobilehome parks, 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, then the last rental rate charged for the space under the previous rental agreement shall be the base rent for purposes of rent control calculations.

ii. In the first sentence of the first paragraph of a rental agreement entered into on or after January 1, 1993, pursuant to this section, there shall be set forth a provision in at least twelve-point boldface type if the rental agreement is printed, or in capital letters if the rental agreement is typed, giving notice to the occupant that the rental agreement will be exempt from local rent control provisions.

b. Rental agreements subject to this section shall meet all of the following criteria:

i. The rental agreement shall be in excess of twelve months' duration.

ii. The rental agreement shall be entered into between the management and an occupant for the personal and actual residence of the occupant.

iii. The occupant shall have at least thirty days from the date the rental agreement is first offered to the occupant to accept or reject the rental agreement.

iv. The occupant who executes a rental agreement offered pursuant to this section may void the rental agreement by notifying management in writing within seventy-two hours of the occupant's execution of the rental agreement.

c. If, pursuant to paragraph iii or iv of subdivision b, the occupant rejects the offered rental agreement or rescinds a signed rental agreement, the occupant shall be entitled to instead accept a rental agreement for a term of twelve months or less from the date the offered rental agreement was to have begun. In the event the occupant elects to have a rental agreement for a term of twelve months or less, including a month-to-month rental agreement, the rental agreement shall contain the same rental charges, terms and conditions as the rental agreement offered pursuant to subdivision b, during the first twelve months, except for options, if any, contained in the offered rental agreement to extend or renew the rental agreement.

d. Nothing in subdivision c shall be construed to prohibit the management from offering gifts of value, other than rental rate reductions, to occupants who execute a rental agreement pursuant to this section.

e. With respect to any space in a mobilehome park that is exempt under subdivision a from the rent control provisions of this chapter a mobilehome park shall not be assessed any fee or other exaction for a park space that is exempt under subdivision a for the purpose of defraying the cost of administration thereof.

f. At the time the rental agreement is first offered to the occupant, the management shall provide written notice to the occupant of the occupant's right (1) to have at least thirty days to inspect the rental agreement, and (2) to void the rental agreement by notifying management in writing within seventy-two hours of the acceptance of a rental agreement. The failure of the management to provide the written notice shall make the rental agreement voidable at the occupant's option upon the occupant's discovery of the failure. The receipt of any written notice provided pursuant to this subdivision shall be acknowledged in writing by the occupant.

g. No rental agreement subject to subdivision a that is first entered into on or after January 1, 1993, shall have a provision which authorizes automatic extension or renewal of, or automatically extends or renews, the rental agreement for a period beyond the initial stated term at the sole option of either the management or the occupant.

h. This section does not apply to or supersede other provisions of this chapter or state law.

2. Space Not Used as Principal Residence.

a. Notwithstanding any other section in this chapter, if a mobilehome space within a mobilehome park is not the principal residence of the occupant and the occupant has not rented the mobilehome to another party, it shall be exempt from the rent control provisions of this chapter.

b. Nothing in this section is intended to require any occupant to disclose information concerning his or her personal finances. Nothing in this section shall be construed to authorize management to gain access to any records which would otherwise be confidential or privileged.

c. For purposes of this section, a mobilehome shall be deemed to be the principal residence of the occupant, unless the requirements of Civil Code Section 798.21(c) are satisfied.

d. Before modifying the rent or other terms of tenancy as a result of a review of state or county records, as described in subdivision c, the management shall notify the occupant, in writing, of the proposed changes and provide the occupant with a copy of the documents upon which management relied.

e. The occupant shall have ninety days from the date the notice described in subdivision d is mailed to review and respond to the notice. Management shall not modify the rent or other terms of tenancy prior to the expiration of the ninety-day period or prior to responding, in writing, to information provided by the occupant. Management shall not modify the rent or other terms of tenancy if the occupant provides documentation reasonably establishing that the information provided by management is incorrect or that the occupant is not the same person identified in the documents. However, nothing in this subdivision shall be construed to authorize the occupant to change the owner's exemption status of the other property or mobilehome owned by the occupant.

f. This section shall not apply under any of the following conditions:

i. The owner or occupant is unable to rent or lease the mobilehome because the owner or management of the mobilehome park in which the mobilehome is located does not permit, or the rental agreement limits or prohibits, the assignment of the mobilehome or the subletting of the park space.

ii. The mobilehome is being actively held available for sale by the occupant, or pursuant to a listing agreement with a real estate broker licensed pursuant to Chapter 3 (commencing with Section 10130) of Part 1 of Division 4 of the Business and Professions Code, or a mobilehome dealer, as defined in Section 18002.6 of the Health and Safety Code.

iii. The legal owner has taken possession or ownership, or both, of the mobilehome from a registered owner through either a surrender of ownership interest by the registered owner or a foreclosure proceeding.

3. New Construction. Notwithstanding any other section of this chapter, "new construction" as defined herein, shall be exempt from the rent control provisions of this chapter. (Ord. 03-02 § 2, 2003: Ord. 99-03 § 1, 1999: prior code § 9.60.020)

A. Increases in Base Rents.

1. Provided that the notice of increase required by law is given, once a year management may increase the base rent, either by a seventy-five percent of CPI rent increase (pursuant to Section 5.20.031 A) or by an amount necessary to maintain net operating income of the park, adjusted for inflation (pursuant to Section 5.20.031 C).

2. On transfer of the mobilehome in place, management may increase the base rent for the successor occupant as provided in Section 5.20.070.

3. When a mobilehome space reverts to management control through lawful means, for example, by voluntary action taken by the occupant (i.e., the occupant voluntarily terminates his or her right to occupy the space regardless of whether the mobilehome is removed from the space) or when a tenancy is terminated as allowed by law, or when there has been an abandonment, management may negotiate a new base rent for the reverted space notwithstanding the maximum rent allowed under this chapter. The new base rent shall thereafter be subject to the provisions of this chapter.

B. Rent Increases for Capital Expenses and/or Capital Improvements. Rents shall not include any charges for capital expenses and/or capital improvements, except pursuant to Sections 5.20.031 D and E. (Ord. 03-02 §§ 3, 4, 2003; Ord. 92-17 § 3, 1992: prior code § 9.60.030)

A. Seventy-Five Percent of CPI Increase. Once a year, management may notice a "seventy-five percent of CPI increase," to be calculated as the product of (a) base rent then in effect, multiplied by (b) seventy-five percent of the increase in the most recently published Consumer Price Index for All Urban Consumers, All Items, in the Los Angeles-Long Beach-Anaheim area ("CPI"), over the CPI one year earlier. If the Department of Labor, Bureau of Labor Statistics, should discontinue use of such CPI, then the city clerk shall specify and management shall use the most similar index available.

B. Rent Increases in Excess of Seventy-Five Percent of CPI. The park owner may notice and receive an annual increase in rent in excess of seventy-five percent of CPI only if such increase in rent is calculated in compliance with Section 5.20.031 C (increases in base rent to maintain net operating income), Section 5.20.031 D (rent increases for capital expense charges) and Section 5.20.031 E (rent increases for capital improvement charges).

C. Increases in Base Rent to Maintain Net Operating Income. Management shall be entitled to an increase in base rent to the extent necessary to provide management with the same net operating income per rental space as management received in the base year, after adjusting base year net operating income for inflation. Such maintenance of net operating income increase in base rent shall be calculated as set forth below.

1. "Base year" means the last fiscal or calendar year in which the park was owned by the predecessor owner to the park owner on July 1, 1992. If financial information for such year is unavailable or incomplete, then "base year" means the first fiscal or calendar year in which the park was owned by the park owner on July 1, 1992.

2. "Prior year" means the calendar or fiscal year which ended prior to the notice of rent increase. The last month of the base year for a park shall be the same month of the year as the last month of the prior year. For example, if the base year was January 1 through December 31, 1986, then, for purposes of maintenance of net operating income calculations for a rent increase noticed in spring 1994 to become effective on July 1, 1994, the prior year would be January 1 through December 31, 1993.

3. "Operating income per space per month" means the sum of management's annual gross receipts from base rent, submetered utilities, coin-operated laundry facilities and storage charges (e.g., for recreational vehicles), divided by the number of rental spaces in the park, divided by twelve months.

4. "Operating costs per space per month" means management's annual ordinary and necessary operating expenses, divided by the total number of spaces in the park (which may be equal to or more than the number of rental spaces), divided by twelve months.

a. "Management's ordinary and necessary operating expenses" means the sum of insurance premiums for the park, maintenance and repair costs (other than capital expenses), supplies, property taxes and assessments, licenses and fees in connection with operating the park, resident manager and other on-site employee expenses, the cost of obtaining an annual review by a licensed public accountant or certified public accountant of park income and expenses for purposes of maintaining financial data pursuant to this chapter, all utility-related expenses (after discounts and rebates) and other reasonably required expenses in connection with operating the park (e.g., cost of recreational activities provided for park residents).

b. If a management fee for off-site property management services is paid in the immediate prior year but was not paid in the base year, then a management fee shall be imputed in the base year on the same basis as such fee is charged in the prior year and included as an operating cost in the base year as well as in the prior year.

c. "Management's ordinary and necessary operating costs" shall not include any amounts for mortgage expenses, either for principal or interest, or for depreciation.

5. "Net operating income per space per month" or "NOI per space per month" means the difference between operating income per space per month and operating costs per space per month.

a. "Prior year NOI per space per month" means the net operating income per space per month in the prior year.

b. "Base year NOI per space per month" means the net operating income per space per month in the base year.

c. "Inflation -- adjusted base year NOI per space per month" means base year NOI per space per month, multiplied by the CPI in the last month of the prior year, divided by the CPI in the last month of the base year.

6. If inflation-adjusted base year NOI per space per month is greater than prior year NOI per space per month, then management shall be entitled to an increase in base rent for each rental space in the park equal to such difference in lieu of the seventy-five percent of CPI increase.

D. Capital Expenses.

1. If management seeks a maintenance of net operating income increase in base rent, then, in addition to any allowable maintenance of net operating income increase in base rent, management may also seek and shall receive a rent increase to reimburse its costs for a capital expense which (a) was incurred during the prior year or in the current year (prior to the date of the rent increase notice) in response to an urgent need or emergency condition (e.g., to repair a failure in an underground natural gas pipeline), or (b) is proposed to be carried out (e.g., nonemergency but needed road resurfacing).

2. The amount of a rent increase for capital expense charges shall be calculated as follows: the total cost of the capital expense together with reasonable financing costs shall be amortized on a monthly basis over the expected useful life of the capital expense and then divided by the total number of spaces in the park, in order to determine the amount of the capital expense per space per month. The expected useful life of a capital expense shall, if possible, be determined by reference to Internal Revenue Service straightline depreciation/amortization schedules and guidelines.

3. Each capital expense shall be reasonably necessary, including emergency repairs. If all or a part of the capital expense is not reasonably necessary, then all or such part of the capital expense shall not be the basis for a rent increase under this subsection. For example, if park roadways are repaved and have a useful life of ten years, a further capital expense for repaving such roads should not be reasonably necessary under ordinary circumstances until near or after the end of the expected useful life of the prior repaving job. However, an expected useful life of a capital expense does not guarantee that the repair or replacement will not require a further capital expense prior to full amortization of the prior capital expense (since the expected useful life is based on averages), and a further rent increase for the further capital expense shall be permitted if reasonably necessary under the circumstances.

4. Any notice of a rent increase which includes a rent increase for capital expenses shall contain a payment plan for the capital expense rent increase per space per month and the time period required to amortize the cost of the capital expense over the expected useful life with reasonable financing (e.g., ten dollars per space for seventy-two months). Such rent increase for a capital expense shall be included in rent until the capital expense has been fully amortized under the payment plan. Management shall discontinue charging a rent increase for a capital expense at the time which was specified by the payment plan.

5. If management fails to begin construction of a proposed capital expense within six months after beginning to charge for the cost of the capital expense, then management shall discontinue the increase for the capital expense and shall credit any amounts collected to each homeowner on his/her next rent statement.

E. Capital Improvements.

1. In addition to either a seventy-five percent of CPI or a maintenance of net operating income increase in base rent, management may also seek and obtain a rent increase for a capital improvement if (a) management has obtained the written consent to such capital improvement of either (i) a majority of the owners of mobilehomes in any park owned by a corporation whose shareholders are residents in the park, with each rental space and shareholder-occupied space in such a park being entitled to one vote, or (ii) a homeowner majority in any other park, or (b) the capital improvement is required by a change in governmental law or regulation.

2. The amount of a rent increase for a capital improvement shall be calculated as follows: the total cost of the capital improvement together with reasonable financing costs shall be amortized on a monthly basis over the expected useful life of the capital improvement and then divided by the total number of spaces in the park, in order to determine the amount of the capital improvement per space per month. The expected useful life of a capital improvement shall, if possible, be determined by reference to Internal Revenue Service straightline depreciation/amortization schedules and guidelines.

3. Any notice of a rent increase which includes rent for a capital improvement shall contain a payment plan showing the cost of the capital improvement per mobilehome space and the time period required to amortize the cost of the improvement over the expected useful life with reasonable financing (e.g., ten dollars per space for seventy-two months). Such amount shall be included in rent until the capital improvement has been fully amortized. Management shall discontinue charging rent for a capital improvement at the time which was specified by the payment plan.

4. If management fails to begin construction of a capital improvement within six months after beginning to charge for the cost of the capital improvement, then management shall discontinue the rent increase for the capital improvement and shall credit any amounts collected to each homeowner on his/her next rent statement. (Ord. 92-22 § 1, 1992; Ord. 92-17 § 4, 1992)

Each month management shall provide each homeowner with a statement showing the following:

A. The rent then in effect, including a breakdown showing:

1. Base rent; and

2. The monthly amount for each capital expense and/or capital improvement included in rent, if any, and the date by which the charge for each capital expense and/or capital improvement included in rent will be fully amortized; and

B. Each submetered utility charge. (Ord. 92-17 § 5, 1992)

A. An annual notice of rent increase, given in accordance with state law, shall set forth (1) the increase in base rent and the amount of base rent after the increase, (2) the rent increase for each new capital expense and/or capital improvement, if any, and the payment plan for each, and (3) total rent (including rent for old capital expenses and/or capital improvements which have not been fully amortized). If the noticed rent increase exceeds the seventy-five percent of CPI rent increase, then the annual notice of rent increase also shall comply with Section 5.20.034 A.

B. If management complies with the meet and confer process set forth in Section 5.20.034, then management shall be entitled to receive the rent increase in excess of the seventy-five percent of CPI rent increase as of the effective date of increase specified in the notice, unless either (a) a homeowner majority has validly petitioned for a rent hearing in accordance with the rules or (b) management and homeowner representatives have entered into a settlement agreement through the meet and confer process. (Ord. 92-17 § 6, 1992)

A. If a noticed rent increase exceeds the seventy-five percent of CPI rent increase, then the notice of rent increase shall include the following information in substantially the following form:

In accordance with provisions of the City of Pismo Beach Mobilehome Rent Control Regulations, we are providing you with the following information:

The rent increase in this notice is greater than 75% of the increase in the Consumer Price Index. A meet and confer session is scheduled for (date) at (place) to discuss the basis for this increase. Homeowners must send representatives to this session, but not more than four representatives. Your representatives may obtain information upon which this increase is based at (place) , beginning (date) . If the date for the meet and confer session is not convenient for your representatives, it may be possible to change that date by consulting with (person) .

If a petition for rent hearing is filed, then additional rent in the amount of a fee for one-half of the per space rent hearing fee as established by the City of Pismo Beach will be charged. If you fail to send representatives to the meet and confer session and a petition for a rent arbitration is filed, then you may be required to pay an additional fee for what would otherwise be management's share of the hearing fee charged by the City of Pismo Beach.

B. If a noticed rent increase exceeds the seventy-five percent of CPI rent increase, then a meet and confer session shall be scheduled between seventeen and twenty-five days following the date of the annual notice of rent increase unless otherwise agreed to by the parties. Meetings shall be held within the mobilehome park or at another location agreeable to the parties. No later than ten days following the date in the notice of increase, management shall make available to representatives selected by homeowners the following information:

1. A statement reviewed by a certified public accountant or licensed public accountant listing expenses and income (including costs for property taxes and assessments, maintenance/repairs, supplies, on-site employee expense, insurance, utility costs, property management fees, expenses paid to a certified public accountant or licensed public accountant for financial statement review and preparation, any other costs in operating the park, and submetered utility income and laundry/storage income) for the prior year, which statement shall comply with the evidentiary requirements of the rules concerning financial information;

2. A statement prepared by a certified public accountant or licensed public accountant listing income and expenses (including costs for property taxes and assessments, etc., as set forth above) for the two years preceding the prior year and the base year, which statement shall comply with the evidentiary requirements of the rules concerning financial information except that compiled rather than reviewed statements may be provided for the base year, 1990 and 1991 (for years ending in or after 1992, reviewed statements shall be provided -- See Section 5.20.040 B);

3. Any other information upon which an increase is based (e.g., "bids" for capital expenses or capital improvements, and calculations of inflation-adjusted base year NOI per space per month and prior year NOI per space per month).

C. Management shall have no more than four representatives at the meet and confer session(s) and shall include at least one representative personally familiar with the basis for the rent increase, including income/expense documents, and with sufficient authority to make decisions binding on park management during the meet and confer session.

D. Homeowners shall have no more than four representatives at the meet and confer session(s), and these representatives shall have sufficient authority to make decisions binding on all homeowners in the park during the meet and confer session, subject to veto by the homeowners.

E. Any settlement agreement resulting from the meet and confer session shall be put into writing, signed by the representatives of the parties, and circulated among homeowners. Such settlement agreement shall be effective in lieu of the noticed increase unless vetoed by the homeowners.

F. Homeowners may veto a settlement agreement by filing a valid petition to contest the noticed increase pursuant to the rules. The filing of a valid petition shall nullify a settlement agreement between management representatives and homeowner representatives. (Ord. 94-01 § 1, 1994; Ord. 92-22 § 2, 1992; Ord. 92-17 § 7, 1992)

A. The city council shall adopt by resolution rules for mobilehome park rent hearings.

B. If a homeowner majority petitions for a rent hearing within fifty days after the date of the annual notice of rent increase in accordance with the rules, then (i) a hearing officer shall be selected, (ii) management shall pay a hearing fee to the city (and shall be entitled to bill homeowners for one-half of such hearing fee after paying the fee), and (iii) a rent hearing shall be held and decision rendered, all in accordance with the rules and this chapter.

C. A failure by homeowners to participate in the meet and confer process shall be grounds for the hearing officer to award an additional one-time rent increase equal to management's one-half share of the hearing fee under the rules, to be paid by each homeowner. Similarly, a failure by management to participate in the meet and confer process shall be grounds for the hearing officer to order management to refund the one-half share of the hearing fee paid by each homeowner, as a credit against rent. The hearing officer shall have discretion whether to make such awards, depending on the facts and circumstances of a particular matter.

D. Where a homeowner majority has petitioned for a hearing on an increase and the hearing is to be held after the effective date of increase, management may collect the increase pending the hearing officer's decision; however, any portion of an increase in excess of seventy-five percent of the CPI increase shall be placed in an interest-bearing account and held by management as trustee for the homeowners of the park.

1. Where the hearing officer approves the full amount of noticed increase, management shall be entitled to retain the full amount in the interest-bearing account together with accrued interest, if any.

2. Where the hearing officer approves an increase in an amount less than the amount noticed, management shall be entitled to the full amount in the interest-bearing account subject to a homeowner credit against future rent. The amount of the credit shall be the difference between the amount deposited in the interest-bearing account and the amount approved, plus a proportional amount of the interest, if any, prorated among the tenancies. Management shall notify each homeowner in writing of the amount of credit. (Ord. 92-17 § 8, 1992)

If management reduces or eliminates any service or amenity to homeowners, then management shall reduce the affected homeowner's base rent by the per space per month share of the cost savings due to such reduction or elimination of such service or amenity. If homeowners believe there has been a reduction in services or amenities, then they may select representatives and schedule a meeting with management to discuss the issue. If the issue is not resolved in such meeting or management refuses to meet with the selected representatives within a reasonable time, then a homeowner majority may petition for a rent hearing on such issue at any time thereafter through and including fifty days after the date of the next annual notice of rent increase. (Ord. 92-17 § 9, 1992)

A. Management shall not demand, accept, or retain more than the maximum rent permitted by this chapter, and management shall not effect a prohibited rent increase through the reduction or elimination of services or amenities by failing to reduce rents in the amount of its cost savings.

B. Management shall keep detailed records concerning the monthly rents and rent increase dates for all spaces in the mobilehome park. Such records shall be available for inspection by the city during business hours. Management shall maintain and retain proper records to substantiate year-end statements setting forth operating income and operating expenses as defined in this chapter, with a review letter prepared by a licensed public accountant or certified public accountant. A copy of the review letter and statement shall be filed annually with the city clerk within ninety days after the park's year end.

C. Evictions. Management shall not bring any action to recover possession of a space subject to the provisions of this chapter unless:

1. The homeowner has violated an obligation or covenant of her or his tenancy and has failed to cure such violation after having received written notice thereof from management (Civil Code Sections 798.56 (a), (d) and (e));

2. The homeowner is committing, or permitting to exist, a nuisance on, or is causing substantial damage to, the space, or is creating a substantial interference with the comfort, safety or enjoyment of homeowners or other residents of the mobilehome park (Civil Code Sections 798.56 (a), (b), (c) and (d));

3. The homeowner is convicted of using or permitting the space to be used for any illegal purpose (Civil Code Section 798.56 (c));

4. The homeowner has refused management reasonable access to the space for the purpose of making necessary repairs or improvements required by the laws of the United States, the state or any subdivision thereof, or for the purpose of inspection as permitted or required by law (Civil Code Sections 798.56 (a) and (d)).

D. Refusal of a Homeowner to Pay a Rent Increase. A homeowner may refuse to pay any increase in rent which is in violation of this chapter and such violation shall be a defense in any action brought to recover possession of a space or to collect the unlawful rent increase.

E. Violation of Chapter. It shall be unlawful for management to demand, accept, receive or retain any payment of rent in excess of the maximum lawful rent set forth in this chapter. A violation of this chapter shall be a defense in any action brought by management to recover possession of a space. (Ord. 92-17 § 10, 1992: prior code § 9.60.040)

Every two years, a subcommittee appointed by the mayor of the city shall review this chapter and the effectiveness thereof, including but not limited to whether or not this chapter is fair and equitable to both homeowners and management. The subcommittee shall thereafter with due diligence report back to the council the results of such review, including but not limited to recommendations for such amendments to this chapter as the subcommittee shall deem necessary and proper at that time. (Ord. 92-17 § 11, 1992: prior code § 9.60.050)

In the event any owner of a mobilehome park sells or otherwise in any manner transfers whether voluntarily or involuntarily any such park, the buyer or transferee of such park shall be bound by the rental increases permitted in this chapter as though such sale or transfer had not occurred. (Prior code § 9.60.060)

A. Notwithstanding any other provision of this chapter, the mobilehome park owner may increase the rent for any space in the park as provided in this section whenever there is a sale and/or transfer of ownership of a mobilehome by a sum not to exceed ten percent above the then current base rent for that space. However, no increase may be charged by reason of interspousal transfers or transfers to court-appointed trustees, guardians or conservators.

B. A rent increase under this section may be charged for a particular space no more often than once every three years, regardless of the number of actual transfers. Park management shall submit to the city clerk a notice of each change in space rent, giving names of sellers and buyers, date of change, space number, amount of previous rent, and amount of increased rent. This notice shall be available for reference when determining permissible space rent increases.

C. Notwithstanding any other provision of this chapter, this section shall apply to mobilehome parks as defined herein only to the extent allowed under state law and specifically as limited by Cal. Civil Code § 1954.50 et seq. (Ord. 03-02 § 5, 2003; Ord. 92-18 § 1, 1992: Ord. 90-15 § 1, 1990: prior code § 9.60.070)

A. 1. Management shall permit an occupant to rent his or her home that serves as the occupant's primary residence or sublet his or her space, under the circumstances described in subdivision 2 and subject to the requirements of this section.

2. An occupant shall be permitted to rent or sublet pursuant to subdivision 1 if a medical emergency or medical treatment requires the occupant to be absent from his or her home and this is confirmed in writing by an attending physician.

B. The following provisions shall apply to a rental or sublease pursuant to this section:

1. The minimum term of the rental or sublease shall be six months, unless the management approves a shorter term, but no greater than twelve months, unless the management approves a longer term.

2. The management may require approval of a prospective renter or sublessee, subject to the process and restrictions provided by subdivision (a) of Section 798.74 for prospective purchasers of mobilehomes. A prospective sublessee shall comply with any rule or regulation limiting residency based on age requirements. The management may charge a prospective sublessee a credit screening fee for the actual cost of any personal reference check or consumer credit report that is provided by a consumer credit reporting agency, as defined in Section 1785.3, if the management or his or her agent requires that personal reference check or consumer credit report.

3. The renter or sublessee shall comply with all the rules and regulations of the park. The failure of a renter or sublessee to comply with the rules and regulations of the park may result in the termination of the occupant's tenancy in the mobilehome park. An occupant's tenancy may not be terminated under this paragraph if the occupant completes an action for unlawful detainer or executes a judgment for possession, pursuant to Chapter 4 (commencing with Section 1159) of Title 3 of Part 3 of the Code of Civil Procedure within sixty days of the occupant receiving notice of termination of tenancy.

4. The occupant shall remain liable for the mobilehome park rent and other park charges.

5. The management may require the occupant to reside in the mobilehome park for a term of one year before management permits the renting or subletting of a mobilehome or mobilehome space.

6. If a security deposit has been refunded to the occupant, the management may require the occupant to resubmit a security deposit in an amount or value not to exceed two months' rent in addition to the first month's rent. Management may retain this security deposit for the duration of the term of the rental or sublease.

7. The occupant shall keep his or her current address and telephone number on file with the management during the term of rental or sublease. If applicable, the occupant may provide the name, address, and telephone number of his or her legal representative.

C. An occupant may not charge a renter or sublessee more than an amount necessary to cover the cost of space rent, utilities, and scheduled loan payments on the mobilehome, if any. (Ord. 03-02 § 6, 2003)

A. The city council has made findings that certain mobilehome spaces in mobilehome parks within the city are possibly being charged an inequitable rental rate for mobilehome spaces, and that inequitable rates may have been imposed on spaces transferred just prior to and in anticipation of enactment of these rent control regulations, and in derogation to the city's overall rent control scheme.

B. A mobilehome owner within the city may petition for a rollback of rent pursuant to the standards and procedure as set forth in this section. In order to be considered for a rent rollback, a petitioner for a rent rollback must submit a formal written petition to the city manager (or designee) requesting consideration of a rollback of rent. The city council may set by resolution a fee to be paid by the petitioner. In order to be considered by the city council, the petition must provide evidence that:

1. The rate was imposed in response to or in anticipation of the city's regulation of mobilehome rent, and

2. The rate is arbitrary and excessive in light of the rent control scheme.

C. If the petition meets the criteria established above, pursuant to review by the city manager, the city clerk shall set the matter for hearing before the city council within forty-five days of receiving the petition. The affected mobilehome park owner shall be provided notice of the public hearing at least thirty days prior to the public hearing. The mobilehome park owner can submit a formal written protest against a rollback of rent. The protest and supporting documents must be submitted to the city manager no later than ten days prior to the scheduled hearing date. The city council shall make written findings and determinations supporting its decision based upon the testimony and documents presented to it at the hearing, and shall adopt its written findings and determinations within fourteen days of the close of the hearing on the matter.

D. A rolled back equitable space rental rate will be determined by adding ten percent to the rent as paid by the prior tenant, or in excess of ten percent as determined to be equitable by the city council. The rent will then be adjusted to account for increases up to the current year. Unless otherwise determined, tenants shall not be reimbursed for rents paid to date as an allowance for any possible transfer of value for a mobilehome at the time of purchase.

E. All decisions of the city council shall be conclusive and final. Enforcement actions can be instituted by the city, or any affected mobilehome tenant, or the mobilehome park owner. A tenant may refuse to pay any rent in excess of the determinations of the city council, and this shall be a defense in any action brought to recover possession of a space or to collect the unlawful rent.

F. A homeowner must petition the city council for a rent rollback by January 1, 1998, or within three years from the date of the initially imposed arbitrary and excessive rent. (Ord. 97-05 § 2, 1997)